VW to Halve Model Lineup and Cut Production Capacity

Volkswagen said on Thursday that it plans to sharply reduce its model lineup and production capacity as Europe’s largest automaker considers a restructuring that sources say could cost around 100,000 jobs.

High costs, excess capacity, Chinese competition and US tariffs halved its profit margins between 2021 and 2025. The company said it would gradually cut its lineup by up to half and reduce annual production capacity from ten million to nine million vehicles.

“The global situation has continued to deteriorate over the past twelve months”, Chief Executive Oliver Blume said. “That is why we are acting now.”

Sources said Volkswagen was considering closing four German plants – Hannover, Emden, Zwickau and Audi’s Neckarsulm site. The company did not comment on the possible closures or job cuts.

Around 400 workers protested in Wolfsburg. Works council chair Daniela Cavallo warned that “great fear and deep uncertainty” were spreading through the company.

Volkswagen is also under pressure from the Porsche and Piech families, while its shares have lost more than half their value over the past three years. Chancellor Friedrich Merz has promised reforms to improve Germany’s competitiveness.

(Reuters, Max)