At the same time, VW revealed that its top executives would be paid a total €63.2 million for 2015 despite the huge loss incurred from the scandal, even if a large chunk of that pay would initially be held back for a period of three years.
“Volkswagen is far more than (just a) crisis,” chief executive Matthias Müller told the group's annual news conference, after the emissions-cheating scandal pushed VW into its first year-end loss in more than 20 years last year.
“But we can nonetheless hardly avoid saying that the current situation demands everything of us, in every respect — including financially,” he added.
As already reported last week, VW unveiled a massive loss of €1.58 billion in 2015 after setting aside €16.2 billion in provisions to cover the potential fines, lawsuits and recall costs it foresees from the scandal so far.
It was the auto giant's first loss since 1993. In 2014, it chalked up a profit of €10.8 billion.
Nevertheless, the group's finance chief, Frank Witter, insisted VW would drive back into the black in 2016.
“We're starting from the assumption that we'll end the year in profit,” Witter said.
CEO Müller told the news conference that the huge provisions would cover the “technical measures related to the diesel engines.”
VW has started recalling the affected cars in Europe to replace the rogue software, known as “defeat devices” because they deliberately skew a car's emissions when undergoing testing.
It announced that owners of Golf TDI models could start phoning in for re-fitting appointments at their local garage as from Thursday.
But it has also set aside €7.8 billion to repurchase affected vehicles and another €7.0 billion for potential legal risks, with the carmaker facing regulatory fines and compensation claims.
Müller also said VW was doing everything within its power to identify the masterminds behind the scam via an internal enquiry.
'Challenging' year ahead
“We ourselves have the closest interest in learning everything possible about both the causes and the responsibilities,” he said.
Looking ahead to the current year, Müller acknowledged that “2016 will again be very challenging.”
Nevertheless, “we are not letting the crisis slow us down, but are stepping on the gas – in all of our brands, and in all relevant markets,” the CEO said.
“All in all, from today's perspective we have good chances of again recording solid growth in our operating business in 2016.”
Volkswagen would emerge stronger from the current crisis, Müller insisted, “because we have a solid position on the operational side. Because our financial substance is strong. Because we know what needs to be done. And because we will do whatever is necessary,” he said.
CFO Witter also indicated that 2016 would be challenging.
“It is not only fundamental internal changes that pose challenges this year but also the overall economic environment,” he said.
“This fiscal year will be characterised by continuing subdued growth prospects and sustained political uncertainty as well as strong currency fluctuations, difficult developments in some markets and the consequences of the diesel issue,” the CFO continued.
“Nevertheless, our goal is to reach the previous year's volume of deliveries again and strengthen our sound economic position,” he concluded.
Millions in bonuses
Separately, VW revealed that its management board would be paid a total €63.2 million for 2015 despite the huge year-end loss, but a large chunk of that would only be paid if the company's share price reached agreed targets over the next three years.
The group's annual report revealed that CEO Müller would be paid €4.76 million euros – comprising a fixed basic salary of €1.1 million plus performance-related bonuses of €3.65 million.
Müller's predecessor Martin Winterkorn, who resigned in the wake of the scandal, would receive €7.31 million, down from €15.86 million the year before, the report showed.
And Hans Dieter Pötsch, who switched from his position of chief financial officer to become head of VW's supervisory board in the wake of the scandal, would be paid €5.1 million euros for his time as CFO. In addition, Pötsch would receive 13,400 euros for his supervisory board duties.
The issue of the VW board's pay has been topic of much public debate about whether the managers are morally entitled to performance-related bonuses after prescribing a bout of belt-tightening.
VW employs 600,000 people globally.