In the wake of its diesel and CO2 emissions cheating scandal, the Volkswagen Group has undertaken a massive cost-cutting program that CEO Matthias Müller says will lead to anything not being absolutely necessary either getting canceled or postponed.

VW has already confirmed that its investment bill for 2016 will be reduced by $1 billion euros (approximately $1.05 billion), and now there are reports the automaker has identified as much as 1.9 billion euros ($2.0 billion) in cost savings.

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Some of the savings will be brought about by reducing the number of variants and trim options, particularly for VW-branded cars. Some senior executives will also receive lower bonuses. The information was revealed to Bloomberg by Bernd Osterloh, who represents VW’s workers.

“We from the works council have long flagged the huge range of model variants and different components,” Osterloh explained. “That brings enormous complexity and adds to costs, for example, for logistics."

Other measures that we know of include canceling a new design center in Germany and a paint shop in Mexico, delaying the arrival of the next-generation VW Phaeton, and reducing the number of entries from Audi and Porsche in the 2016 24 Hours of Le Mans from three cars each to two.

There are much more savings to be made, as the VW brand alone is targeting around 5 billion euros ($5.3 billion) in savings all up. This is to help offset potentially billions in costs from recalls and fines as well as a possible drop in sales. According to Osterloh, production will also be scaled back to avoid building up inventories.

To view our past coverage on the VW Group's emissions cheating scandal, head to our Volkswagen news hub.


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