Newly appointed chairman Dr Herbert Diess said: “The Volkswagen brand is repositioning itself for the future. We are becoming more efficient, we are giving our product range and our core technologies a new focus, and we are creating room for forward-looking technologies by speeding up the efficiency program.”

Under the changes, the electric Phaeton, which would rival the Tesla Model S, would mark “a new approach for the next generation of the Phaeton” and would herald a new flagship for the brand as well as its environmental strategy.

Few details were released but VW said that the “specification features a pure electric drive with long-distance capability, connectivity and next-generation assistance systems as well as an emotional design”.

Volkswagen also said it would develop an “MEB” electric toolkit that would enable standardisation across compact segment based on the experience gained with existing vehicle architectures.

The standardised system would be used across different vehicles – including LCVs – and group brands, and will enable an all-electric range of 250 to 500km (155-310 miles).

Other changes would see emissions control systems for diesels overhauled, with all models to feature Selective Catalytic Reduction and urea injection in Europe and North America.

The plan also puts a focus on further development of the Modular Transverse Toolkit (MQB) platform used across the group, with greater emphasis on plug-in hybrids with a greater range as well as mass-market electric vehicles with a radius of up to 300km (186 miles), a 48V mild hybrid and efficient diesel, petrol and CNG concepts.

The group added that: “A new standard with regard to connectivity and driver assistance systems is to be defined.”

Dr Herbert Diess concluded: “Together with my Board of Management colleagues and the entire team we are working at top speed on these issues. Time and again, the Volkswagen team has proved it stands united and is fully focused on shaping the future, particularly when times are tough. We have now laid the further foundations for that.”