Because Of The Fiercer Competition, Volkswagen Is Getting Ready To Restructure

Volkswagen is accelerating an extensive restructuring of its business to respond to the increasing competition from Chinese electric vehicle manufacturers, which is why it plans to significantly reduce the number of models, production capacity, and operating costs.

The company announced that by 2030, it will reduce the range of vehicles by as much as 50 percent and simplify model configurations, while the annual production capacity will be reduced from about 10 million to nine million vehicles, the Daily Mail reported.

CEO Oliver Blume stated that global business conditions are further deteriorating due to US tariffs, falling profit margins, and increasingly aggressive competition from Chinese car manufacturers, which is why it is necessary to implement deep changes in the company.

According to Reuters, sources close to the company say that further reductions in the number of employees and reorganization of the production network are being considered after Volkswagen has already agreed to eliminate about 50,000 jobs in the group.

In an internal memo to employees, the CEO warned that, if other cost-cutting solutions are not found, it may be necessary to cut another 50,000 jobs around the world.

At the same time, the management gave up on the immediate closure of the German factories after the opposition of the employees’ representatives in the Supervisory Board, but the future of individual plants is still being considered as part of the long-term restructuring plan.

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