Volkswagen Audi Group have announced they will be withdrawing from the FIA World Rally Championship at the end of the 2016 season.
The news comes just a week after the manufacturer announced they were pulling their Audi Le Mans Prototype programme from the FIA World Endurance Championship.
VAG's rapid withdrawal from top-level motorsport comes as company looks to bounce back from the 'Dieselgate' scandal that rocked them over a year ago.
The company has already changed market strategy, vowing to introduce a range of electric cars, and has committed to the FIA Formula E championship for the future.
The scandal also brought a huge financial burden on the company with the cost to fix problems and pay fines stretching into billions of dollars.
"The Volkswagen brand is facing enormous challenges," said Frank Welsch, a VAG Group board member. "With the upcoming expansion in electrification of our vehicle range we must focus all our efforts on important future technologies."
However, as well as Audi's Formula E foray, Volkswagen themselves will continue to play an active role in motorsport, but will shift their focus to customer competition, as well as continuing to support the Volkswagen Andretti Rallycross team in Red Bull Global Rallycross.
"At the same time, Volkswagen is going to focus more on customer racing," said Welsch. "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."
In addition, Antonio Labate has been appointed as the new Diretor of Strategy, Business Development and Operations for SEAT Sport - another VAG subsidiary, which also happens to build Volkswagen's successful Polo R WRC and Beetle GRC cars.
As well as their Formula E, Red Bull GRC, TCR, and new customer R5 rally programmes, VAG's DTM (with Audi) WRC2 and other rallying (with Skoda), customer GT (with Audi and Lamborghini), and MotoGP and Superbike (with Ducati) programmes are set to continue for the foreseeable future.
It does however mark an end to one of world rallying's most dominant operations.
"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," motorsport director Sven Smeets said. "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."
Volkswagen entered the World Rally Championship in 2013 and have won four consecutive drivers' and constructors' titles, and 42 rallies to date. Just one round of their four year stay in the WRC remains, the season ending 25th Rally Australia later this month.
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