17 Jun 2016

Volkswagen goes electric after diesel scandal

10:12 am on 17 June 2016

Europe's largest carmaker, Volkswagen, has announced plans to develop dozens more lines of electric vehicles as it fights to recover from an emissions scandal.

A sunflower decorates a "green" VW electric car at a service station in Berlin.

A sunflower decorates a VW electric car in Berlin. Photo: AFP

The company last year admitted including software to cheat emissions tests in some of its diesel models, making the vehicles seem cleaner than they were.

It has since lost billions of dollars, and hundreds of thousands of cars have been recalled.

The plans to launch 30 all-electric models are a bid by Volkswagen to reposition itself as a leader in "green" transport.

Chief executive Matthias Mueller said huge investments would be needed, but he hoped that by 2025, all-electric cars would account for up to a quarter of the German carmaker's annual sales.

Latest figures show that sales growth of Volkswagen-branded cars continues to fall behind its European rivals.

Mr Mueller said VW aimed to "make a fundamental realignment in readiness for the new age of mobility".

VW would put special emphasis will be place on e-mobility, he said, launching more than 30 purely battery-powered electric vehicles over the next 10 years.

VW was plunged into crisis when it was revealed in the US last September that diesel engines had been fitted with software that could distort emissions tests. The company later revealed that some 11 million cars worldwide were affected.

Mr Mueller said the transformation would involve investments in the double-digit billions of euros, funded by savings and cost cuts.

He told reporters at VW headquarters in Wolfsburg: "This will require us - following the serious setback as a result of the diesel issue - to learn from mistakes made, rectify shortcomings and establish a corporate culture that is open, value-driven and rooted in integrity."

The company's components business, spread across 26 plants, will be streamlined, and there will be a focus on cutting sales and administration costs.

Car sales data from the European Automobile Manufacturers Association suggest that the VW group continues to suffer from the diesel scandal impact.

Sales of Volkswagen-branded cars rose 4.1 percent in May, compared to the same month last year. But that is sluggish compared to 28.7 percent growth for Renault and 18.7 percent at PSA Group, owner of Peugeot and Citroen.

Market share for the group, which includes Audi, Skoda, and Seat, for the five months to May, was 23.9 percent, the lowest for the period since 2011.

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