Volkswagen is selling off a host of business units to cut costs, including its luxury vehicle division and some luxury brand products, as it tries to turn around its global financials.
The Volkswagen Group is taking a big hit from its diesel emissions scandal, which forced it to recall some 2 million cars and diesel-powered SUVs worldwide and to shut down its U.S. operations.
The company said it would be selling a significant portion of its business unit, or business, including Audi and Porsche, to avoid further tarnishing its image and financials, the Wall Street Journal reported.
The sale includes Volkswagen AG’s Audi and Skoda, which make luxury cars, as well as VW’s luxury brand Audi and Volkswagen, as part of the restructuring, according to the report.
The restructuring includes the sale of Audi, Skoda and Audi brands as well.
The Audi brand and Audi Skoda brands will remain with the company through 2021, and Audi will continue to manufacture some of its luxury vehicles, the Journal reported, citing a person familiar with the matter.
The sales are expected to close in the first half of 2021.
Volkswagen, which is facing tough financial and political pressures, said last week that it would make a decision on the business units and other businesses, including the automotive and chemicals division, by the end of the year.
The deal with Volvo is the latest of several in which the Volkswagen Group has sold off brands or other business units, and the latest to come in recent months as it struggles to respond to the diesel scandal.
VW sold its car manufacturing business, Daimler AG, in January.VW has said it will continue the sale and manufacturing of Audi and its luxury brands through 2021.VW is already selling off Audi, Audi and Audi brand brands, including Mercedes-Benz, in recent years.
In addition, it has been selling off VW’s automotive division and the company’s automotive business, but those companies are part of a larger portfolio that includes VW’s gas and diesel brands and its chemical division, the company said.
Volvo has been struggling to sell off its car brands, which are considered the mainstay of the company.
It has said that it expects to sell around 1.5 million cars in 2019.
Volkswagen has been under fire for its emissions scandal in which it admitted to manipulating emissions tests and fixing them up to cheat on emissions rules.
Volkswagen has been the target of investigations by governments and international regulators.