Volkswagen AG, Europe's largest automaker, is maintaining an investment plan to build a new seven-seater sports utility vehicle.

It is starting next year at its only manufacturing plant in Tennessee, although beset by issues of cost cuts in the wake of the company's diesel-emission manipulation scandal.

Bloomberg quoted Volkswagen spokesman Eric Felber as saying that, "The American market is and will remain a strategically important market for Volkswagen".

The report added VW approved a project last year to spend $900 million, of which $600 million will go towards building the seven-seat SUV.

The strategy is to become a niche player in the US as it has already moved into markets in China and Europe. The seven-seat SUV is to be VW's new strategy after failing to win American car buyers with its mid-sized Passat Sedan.

This month Volkswagen announced it will lower spending on its passenger-car brand by 1 billion euros ($1.1 billion) per year to help cope with costs from fixing the cars, lawsuits and regulatory probes.

The 6.5 billion euros set aside in provisions in the third quarter won't be enough, opined Bloomberg.

Volkswagen's  rigged diesel-emission scandal resulted in recall of 11 million cars worldwide including 480,000 in the U.S. 

New CEO Herbert Diess  apologized at the Tokyo Auto Show on Wednesday for the VW's  emissions-cheating scandal. He promised to win back customer trust, and said it will delay the launch of a diesel vehicle in Japan.

CTV News also referred to the head of Volkswagen's Japan division Sven Stein as bowing for several seconds in a Japanese style of apology.

Diess was quoted by CTV News as saying," On behalf of my entire company, I'd like to apologize," stressing that the priority is to fix the problem, uncover what happened and make sure the scandal never happens again.

Volkswagen is scheduled to report third-quarter earnings on Wednesday and is expected to report a 3.27 billion-euro operating loss, compared with a 3.23 billion euro profit a year ago, according to estimates compiled by Bloomberg. 

Reuters reported  that Volkswagen is dropping plans to reorganize management of its US business and will not address its future strategy there until legal agreements over its rigging of emissions tests are settled.

According to the same report, Volkswagen picked a veteran from its group, Winfried Vahland, before the emission scandal erupted, for its top executive position in the US but Vahland quit the company three weeks later.

Volkswagen has no current plans to appoint a new head for the US until the legal battles related to the emission scandal are sorted out.