Volkswagen is withdrawing itself from the World Rally Championship to focus its development budget on programmes more closely on “future technologies”.

The brand’s withdrawal from the international competition after four historically successful years, in which Volkswagen won WRC titles in the driver, co-driver and manufacturer rankings in a row with the Polo R, follows Audi’s decision to quit the World Endurance Championships after 18 years.

Audi plans to focus its attentions on Formula E.

While falling short of branding the move a cost-saving measure as the Volkswagen Group faces litigation and settlement agreements relating to the dieselgate emissions scandal, Frank Welsch, member of the board of management responsible for technical development told around 200 motorsport employees in Hannover: “The Volkswagen brand is facing enormous challenges. With the upcoming expansion in electrification of our vehicle range we must focus all our efforts on important future technologies.

“We far exceeded our sporting goals in the WRC, now we are realigning Volkswagen Motorsport and moving the vehicle technology of the future more starkly into focus.”

Welsch added: “At the same time, Volkswagen is going to focus more on customer racing. As well as the Golf GTI TCR on the circuit track and the Beetle GRC in rallycross, we also want to offer customers top products and will develop a new Polo according to R5 regulations.”

Volkswagen is currently budgeting towards meeting financial settlements with customers and authorities across the globe that have been affected by its diesel emissions cheating device.

In the US, 652 retailers have been promised $1.2 billion of a $16.5 billion package brokered by the US Justice Department which will see consumers have their vehicles repaired or bought-back (in addition to $10,000 compensation) by the German brand.

Speaking of the measure to reduce the brand’s motorsport commitments this week, Volkswagen’s motorsport director, Sven Smeets, said: “Of course, we regret the departure from the WRC very much – as this was the most successful chapter in the Volkswagen brand's motorsport history. The team has done great things. At the same time, our vision is firmly ahead, because we are aware of the great challenges facing the entire company. We want our realignment to contribute to the success of the Volkswagen brand.”