Volkswagen Motorsport has confirmed it will withdraw from the World Rally Championship at the end of the 2016 season having claimed its fourth consecutive drivers' and manufacturers' titles.

As part of the latest 'realignment of motorsport programmes', which saw Audi - owned by the Volkswagen Group - pull out of WEC at the end of the year, the dominant manufacturer in WRC will contest its final event at Rally Australia later this month before exiting the series.

In light of last year's emissions scandal at VW the company has continued to see its car sales drop after a huge financial penalty while the company has also set aside ?4.8bn to cover the costs.

Using a similar explanation to Audi's reasons behind its WEC departure, Frank Welsch, VW board member in charge of technical developments, confirmed a shift of focus towards electrical vehicles as it realigns its focus from 2017 onwards.

"The Volkswagen brand is facing enormous challenges," Welsch said. "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."

Volkswagen has confirmed it will start a part of the WRC scene by beginning development of a new rally vehicle in the R5-category based on the next generation Polo which will be available to customers teams from 2018 onwards.

The German manufacturer will also retain its commitments to TCR touring car racing across the globe and in the Global Rallycross series.

The decision calls an end to Volskwagen's 2017 Polo R WRC machine which had been running its final tests ahead of next year's regulation revamp and is now expected to never appear on the competitive stage.

For the Volkswagen Motorsport crews of four-time reigning champion Sebastian Ogier as well as team-mate Jari-Matti Latvala and Andreas Mikkelsen, the WRC grid is expected to be shaken up for 2017 with all three crews now looking for new teams.

"I want to give our heartfelt thanks to our drivers and co-drivers for their outstanding achievements," Welsch said. "They are not only unbelievably quick, but also extremely effective ambassadors for the Volkswagen brand. The whole team built around Motorsport Director Sven Smeets has created the basis for this success with the enormous commitment of each individual.

"We want to continue working with this excellent team and bring about the realignment. In the same way, we will expand the close cooperation between production development and motorsport, which has always shown benefits to both sides in recent years."

"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," VW motorsport director Sven Smeets added. "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. From now on, the focus is on upcoming technologies in motorsport and on our customer sports range, where we will position ourselves more broadly and attractively."

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