Auto giant to cut model lineup and capacity
Cars are parked in front of the Zwickau Volkswagen Plant in Zwickau, eastern Germany, on July 9, 2026.
Jens Schlüter | Afp | Getty Images
volkswagenWhile the German auto giant has refrained from announcing any layoffs following tense stakeholder talks, its management plans to massively reduce its model lineup and reduce capacity further.
Europe’s largest automaker on Thursday in question The model range will be gradually reduced by half in the coming years as the focus is on the most attractive market segments.
Meanwhile, production capacity will be reduced to nine million vehicles per year, compared to a target of 12 million before the coronavirus pandemic.
Volkswagen CEO Oliver Blume said in his statement: “With our future plan, we are moving to the next phase of the transformation with our own means.” he said.
“We are making the Volkswagen Group faster, more resilient and more competitive,” he added.
The update follows a high-stakes meeting with the group’s supervisory board on Thursday and follows reports that the company is considering closing four German factories and imposing up to 100,000 redundancies.
German lawmakers and powerful labor unions are strongly opposed to the mass layoff plan, which would represent the most radical overhaul in the company’s nearly 90-year history.
The auto giant has already laid out plans to implement sweeping layoffs and launch a major product push to counter pressures ranging from US import tariffs to increased competition from Chinese auto brands.
Volkswagen employees attend an information and protest event organized by IG Metall in front of the VW factory in Zwickau.
Picture Alliance | Picture Alliance | Getty Images
But the latest reported layoffs will be double the 50,000 layoffs previously announced and are now claimed to include the closure of four German factories (Hanover, Zwickau, Emden and the Audi plant in Neckarsulm). The plans were first reported by Manager Magazine late last month.
Analysts at Jefferies said on Thursday Volkswagen’s rescue plan provided “limited new information” and “no signs of progress” towards reaching an agreement on closing the plant, a five-year investment plan or reducing additional staff by up to 100,000.
‘A perfect storm’
Volkswagen’s General Works Council and German industrial union IG Metall have vowed to push back against reported layoffs and factory closures. A protest was organized by IG Metall in front of the Volkswagen factory in Zwickau, Germany, on Thursday.
Volkswagen shares were last trading up 0.6% on Friday morning. The stock, which recently traded at levels not seen since the summer of 2010, is down more than 30% so far this year.
“If you look at the stock price, it tells you a story,” Henning Gebhardt, partner and fund manager at HollyHedge Consult, told CNBC.European Early Release” on Friday.
“Volkswagen is in a perfect storm: the competition from Chinese rivals is very high, so there’s no real profit coming from China, you have tariffs, you have other competitors who are actually offering nice deals, which Volkswagen doesn’t have at the moment, and generally speaking, the automotive industry is under pressure,” Gebhardt said. said Gebhardt.
