Volkswagen has announced that it will withdraw from the World Rally Championship (WRC), effective from the end of the 2016 season.

The official announcement, made by Volkswagen R&D boss Frank Welsch on Wednesday, brings to an end the most sruccessful chapter in the German car maker’s motorsport history.

Read more: Volkswagen to homologate Polo WRC for 2017 World Rally Championship

“The Volkswagen brand is facing enormous challenges,” said Welsch in an address to around 200 employees at Volkswagen Motorsport division in Wolfsburg. "With the upcoming expansion in electrification of our vehicle range we must focus all our efforts on 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."

Welsch also confirmed a shift in focus towards customer racing programmes. “As well as the Golf GTI TCR for the track and the Beetle GRC in rallycross, we also want to develop a new Polo according to R5 rally regulations.”

The new customer rally car, to be based on the upcoming sixth-generation Polo, is planned to be available to customers from 2018 onwards, according to Welsch.

Since entering the World Rally Championship in 2013, Volkswagen has won four successive driver and manufacturer titles. In the 51 rallies it has so far contested, Volkswagen’s ultra-successful Polo R WRC has recorded 42 wins and 621 best special stage times.

Commenting on the withdrawal, Volkswagen motorsport director Sven Smeets said: “We regret the departure from the WRC very much. The team has done great things.”

Hinting that Volkswagen’s future motorsport involvement could involve electric car technology, Smeets added: “From now on , the focus is on upcoming technologies in motorsport.”

There is nothing official at this stage, but insiders say internal studies are under way into a possible participation in the recently announced Global Electric Rallycross series.

The decision to end Volkswagen’s commitment to the WRC comes in the wake of the diesel emissions scandal, which has already seen the firm pledge more than £10 billion to buy back or fix up to 500,000 cars in the US and develop fixes for affected diesel models in other world markets.

The final round of the 2016 WRC takes place in Coffs Harbour, Australia, on 18 November.

Volkswagen's sister company Audi axed its World Endurance Championship (WEC) sportscar programme last week after 18 years; officials confirmed it plans to switch its focus to Formula E.