- Total job cuts have now grown to 100,000.
- Model range will be cut in half to focus on popular/profitable vehicles.
- VW will redouble its efforts in North America and China.
The board of Volkswagen has just approved a long-term programme aimed at saving the company in the face of falling sales, high production costs, diminishing demand in China for high-profit brands like Audi and the increasing threat from Chinese makers in the European market. It's called Future Plan 2030.
We are taking responsibility for our entire workforce, for our partners and for industrial jobs worldwide," says CEO Oliver Blume. "Over the coming years, we will invest a three-figure billion sum to make our iconic brands even more attractive, stronger and more competitive."
The VW Group includes core brands such as Skoda, Seat, Cupra, Audi, Porsche, Bentley, Lamborghini, Bugatti and motorcycle maker Ducati. It also has a heavy vehicle subsidiary (including MAN, Scania and International) and joint ventures in China.
VW's financial woes have been very public since 2024 - a situation that has grown into a national crisis in Germany. Some political commentators are even linking the rise of far-right political party Alternative for Germany (AfD) to dissatisfaction at the economic situation surrounding the VW crisis.
On September 3, VW announced Supervisory Board approval of Future Plan 2030. While the tenor of the announcement is positive, focusing on investment and improved efficiency, the reality is also a further 50,000 job losses (on top of 50,000 announced earlier, totalling 1/6 of the company's total workforce), and closure of its Emden, Zwickau, Hanover and Neckarsulm plants in Germany, a result of excess capacity of 500,000 cars in the European market. Alternative uses for these facilities are being sought.
The company says Future Plan 30 is "the most extensive transformation programme in the Volkswagen Group’s history."
In its media briefing, VW says that its major "workforce adjustments" will include management roles. The Supervisory Board has asked the Executive Board to develop a model for an "evolved decision-making and group structure".
It talks of "leaner leadership... and shorter lines of decision making [to] empower teams to act faster and take greater ownership".
By 2035, VW intends to streamline its model portfolio by around 50% and reduce its "offering complexity" by around 75%. It says there will be a greater focus on design and technology, with higher volumes achieved from fewer variants. Part of the reduction in complexity includes more sharing of core components like steering wheels and seats across the Group.
The company says it is "systematically tailoring its platforms, electronic architectures, driver assistance systems and software to the needs of both the Western and Eastern hemispheres."
North America and China are cited as two areas of focus.
VW's aim is annual production of 9m vehicles and an operating margin of 9% (currently 3.8%). The company says it intends to focus on the core business of making cars, with extensive revisions of other shareholdings, businesses and real estate. It will "retain only those with a clear strategic and financial contribution to the core business" and will rationalise outside interests by 30%.
VW also emphasises it's taking action quickly: "The Executive Board takes overall responsibility for implementation and will drive the programme forward with clear governance and the necessary pace."