Volkswagen has unveiled a sweeping restructuring plan that will dramatically reshape the carmaker over the next four years, as Europe’s largest automotive group seeks to cut costs, simplify operations and respond to mounting pressure from global competitors, particularly in China.
The plan, presented by the Executive Board to the Supervisory Board on 9 July, forms part of a broader strategy to make the company “more resilient, more efficient and more competitive” by 2030.
Volkswagen said it would streamline its model range by up to 50%, reduce product complexity by as much as 75%, harmonise key technologies across brands and align production capacity with expected demand of around nine million vehicles a year.
Chief executive Oliver Blume described the programme as the next stage in Volkswagen’s transformation.
He said: “Our goal is clear: by 2030, we will make the Volkswagen Group the most attractive automotive company in the world – with iconic brands, inspiring products, leading technologies, robust financial results, reliable capital market performance and a team spirit in action.” Blume added in the company’s announcement. “With our future plan, we are moving into the next phase of transformation by our own means.”
Volkswagen said it had already achieved significant progress over the past three years, including a major overhaul of its software strategy, a regional restructuring of its China operations and improved electric vehicle performance in Europe. The company also said it had offset “double-digit billions” of euros in financial headwinds through cost-saving programmes across its brands.
However, the latest measures come against a backdrop of increasing concern over potential job losses. Reuters reported last month that Volkswagen was considering cutting up to 100,000 jobs worldwide and closing four German factories, including sites in Hanover, Zwickau, Emden and Audi’s Neckarsulm plant. The proposals were described by analysts as potentially the largest restructuring in automotive industry history.
Volkswagen has not confirmed those figures, and the future plan announced this week does not specify the number of jobs that could be affected. But chief financial officer and chief operating officer Arno Antlitz made clear that deeper structural changes were needed.
“Despite the progress achieved, the cost reductions planned to date under the agreed programmes are not sufficient in the current economic and geopolitical environment,” Antlitz said. “We must instead fundamentally realign our business model and achieve structural, sustainable improvements.”
The company faces a combination of challenges, including weaker demand in some markets, rising costs linked to tariffs, growing regulatory burdens and fierce competition from Chinese manufacturers that have rapidly expanded their presence in electric vehicles.
The latest plans build on a restructuring agreement reached with unions in late 2024, under which Volkswagen committed to reducing more than 35,000 jobs in Germany by 2030 through voluntary departures rather than compulsory redundancies. The agreement also included significant capacity reductions and annual savings targets worth billions of euros.
More recently, Volkswagen revealed that around 20,000 workers had already agreed to leave voluntarily under that programme, placing the company ahead of schedule in its workforce reduction efforts. Across Volkswagen, Audi, Porsche and software subsidiary Cariad, more than 28,000 departure agreements have reportedly been signed.
As part of the new strategy, Volkswagen will focus increasingly on its core automotive business while reviewing investments and shareholdings. The group recently agreed to sell a majority stake in Everllence, generating approximately €7.4 billion (£6.4 billion) in cash that it said would strengthen its balance sheet and provide greater flexibility for future investments.
The outcome of the restructuring is likely to be closely watched across the automotive sector. While Volkswagen argues that the measures are essential to secure its long-term future, unions and political leaders have already signalled resistance to deeper job cuts and factory closures.