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Volkswagen AG last week announced that it will delay or cancel any projects it considers non-essential, Bloomberg reported on Tuesday. The news comes as the company looks to cut spending following the emissions scandal. On August 13 this year, Sri Lanka’s Board of Investment announced that it had granted an eight-year tax holiday to Volkswagen AG following the signing of an agreement to set up a US$ 26.5 million an assembly plant in Kuliyapitiya. However, it is not clear whether the “planned investments” Volkswagen AG’s new chief executive Matthias Mueller referred to included the proposed Sri Lanka investment.

In August, BOI chairman Upul Jayasuriya, who signed an agreement for the factory with Noel Selvanayagam, President of Senok Automobile (Pvt) Ltd., sole agents for Volkswagen in the island had said that the automaker had proposed to assemble diesel-powered vehicles in the 1,000cc to 2,000 cc category.
“What isn’t absolutely vital will be cancelled or delayed,” Mueller told employees. “I will be completely clear – this won’t be painless.”

Volkswagen’s new boss has also said it would take more than a year to fix all its cars fitted with pollution cheating devices, as the German auto giant scrambled to put its biggest crisis behind it.
Meanwhile, the Indian unit of German auto maker Volkswagen AG on Wednesday asked its dealers to stop the sale of some models of its hatchback Polo with immediate effect because of technical issues.

“Volkswagen India has confirmed a temporary hold on deliveries of its car line Polo due to a technical reason which is currently under evaluation,” said the company in a statement, without elaborating. “This concerns a limited number of cars out of a specific production period. Volkswagen further confirms that deliveries for the non-impacted Polo range continue as per schedule,” it said.

A letter addressed to Volkswagen dealers, however, asked them to stop the sale of all variants of Polo with immediate effect. “We request, not to deliver any Polo vehicle (all variants) with immediate effect till further notice from VW,” the company said in a directive to its dealers.