Volkswagen is planning drastic action to restructure its business, like shelving half its global lineup.
On Thursday, Volkswagen CEO Oliver Blume laid out a blunt perspective of the present automotive landscape. “The global situation has continued to deteriorate over the past twelve months,” he said following a supervisory meeting in Germany. In response to VW’s rough state of affairs, it plans to gradually cut its global model lineup by half, cull equipment options to reduce complexity and costs, and even lay off up to 100,000 workers as the company considers closing four German plants.
Specifically, the company says it will concentrate on the “most attractive market segments”, while dropping excess manufacturing capacity to produce about 9 million vehicles per year, down from the 10 million it builds now. It could also cut options by up to 75%, as it grapples with weak growth, high labor costs and ferocious competition, particularly in the EV space from Chinese marques.
Per a Reuters report, large worker protests broke out across VW facilities this week, as VW looks into closing its Hanover, Emden, Zwickau and (under Audi) Neckarsulm plants. Blume also faced labor representatives, who strongly oppose such deep cuts across Volkswagen’s range of brands, including Audi, Bentley, Lamborghini, Porsche, Seat, Cupra, Skoda, Scout Motors and the core VW brand itself.
Volkswagen did not specify exactly which model lines are on the chopping block under this restructuring effort. That said, as far as “attractive segments” are concerned, the U.S. market largely straddles those lines already. From the small Taos to the Tiguan and Atlas, VW’s SUVs represent the bulk of its sales volumes in America. The future of the ID.Buzz, on the other hand, despite VW’s earlier claims it would bring the model back for 2027. Same goes for the Jetta sedan and possibly the Golf, though both models’ iconic histories may keep them around.
In other words, the automaker’s U.S. lineup may not change all that much, even with such severe cutting. Overseas models like the T-Cross, T-Roc and Taigo may go away, however, as well as models in China. Consolidation may curtail brands like Cupra or Skoda to fewer models, though we’ll probably have a far better idea of exactly what Volkswagen is thinking later on this year, as it kicks this dramatic plan into action.
