VW emissions scandal: Bugatti under threat as boss warns of "painful" cuts

The future of Volkswagen's Bugatti brand is under threat, as new VW boss Matthias Müller has told German media he is looking at cutting costs and model development in the wake of the company's emissions scandal.

Autocar understands that while investment in mainstream VW models will continue, development of non-core models, including the next-generation Phaeton and Bugatti's Veyron sucessor, could be halted.

Yesterday, Müller addressed workers at the company's Wolfsburg HQ, telling them: “We will review all planned investments, and what isn’t absolutely vital will be cancelled or delayed. I will be completely clear: this won’t be painless.”

"In addition to the huge financial loss, this crisis is primarily a crisis about a loss of confidence. It affects the core of our company and our identity, our cars, and the essence of the brand: solidity, reliability and credibility."

Müller also confirmed that technicians are close to revealing a technical solution to the defeat devices that were employed on cars fitted with the EA189 diesel engine. He confirmed that some cars will require only a software upgrade, whereas others will also require hardware modifications. Unconfirmed reports suggest that the biggest changes will be required on 1.6-litre versions of the engine, although VW has declined to comment. The first recalls of cars affected by the scandal are due to start in January, with VW hoping to have fixed all affected vehicles by the end of next year.

Müller added, "Our most important task will be to regain lost confidence with our customers, partners, investors and the general public. The first step in this direction will be a fast and relentless examination and explanation. Only when everything comes to the table, only when things are completely explained, only then will people trust us again.

"Believe me, I too am impatient. But in this situation, in which we are dealing with four brands and many models, care is more important than speed.

"The technical solutions to the problems are in sight. By contrast, the business and financial consequences are not yet foreseeable."

VW has already set aside 6.5bn euros (£4.7bn) to cover the costs of the scandal, but many industry commentators believe that figure will rise, possibly to a figure three times higher. Since the scandal broke, VW's share price has fallen by almost half its value.

Read more on the Volkswagen emissions scandal:

Six things the firm could cut

VW to recall affected cars in January

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