The announcement brings a conclusion to VW's ultra-successful WRC programme, with the marque capturing four successive manufacturers' titles and four drivers' titles – all courtesy of Sebastien Ogier – since its full-time entry in 2013.

Arriving three days on after VW clinched its 43rd WRC victory and its fourth title at Rally Wales, the news follows on from fellow Volkswagen Group manufacturer Audi's recent exit from the World Endurance Championship.

Both developments are believed to be intrinsically tied with the losses VW Group suffered from its highly-publicised emissions scandal in 2015.

"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,” said VW's Frank Welsch.

“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."

With Volkswagen bowing out, the WRC is set to feature four constructor teams – Citroen, Hyundai, M-Sport and the newly-arriving Toyota – in the 2017 season, where new technical regulations will come into effect.

Ogier and teammates Jari-Matti Latvala and Andreas Mikkelsen, who have looked set to continue in the WRC on an already-developed 2017-spec VW Polo R, will now all have to find new avenues for the continuation of their careers.

"I want to give our heartfelt thanks to our drivers and co-drivers for their outstanding achievements. They are not only unbelievably quick, but also extremely effective ambassadors for the Volkswagen brand," added Welsch.