Volkswagen has further scaled back its investment plans amid a continued slump in the automotive industry, according to a Reuters report.

It said VW would invest €16.3 billion ($US20.96 billion) in 2005 and 2006, a reduction compared with the previous planning round. €11.8 billion of this would go to VW's core automotive division, a drop of 6%. The investment ratio of capital expenditure to sales will be below 7% "on a sustainable basis," allowing it to be competitive compared with other car makers.

"This is a reflection of our intensified efforts to optimise one-off costs within the framework of the ForMotion programme," Volkswagen finance chief Hans Dieter Poetsch told the news agency, which noted that, late last month, Poetsch told analysts during a conference call that the company was on track to deliver a capital expenditure to sales ratio below 7% in the medium term.

The company also reportedly said that investments at its Chinese joint ventures, which aren't included in these figures, will total €2.1 billion during the next two years, 22% less than corresponding figures of the previous planning round.

Reuters said the Volkswagen supervisory board had confirmed the appointment of Chrysler's former star manager Wolfgang Bernhard to the management board in February 2005 and terminated Jens Neumann's appointment to the management board by mutual agreement.

Neumann, responsible for "group strategy, treasury, legal matters and organisation," will leave the board by the end of this year, the report said, while chief executive Bernd Pischetsrieder would assume direct management of those affairs.