Volkswagen Group to axe up to half of its models, cut annual production capacity by a million units – report

The Volkswagen Group is really going through a hard time. Reuters reports that amidst high costs, excess capacity at home, rising Chinese competition and US tariffs, the carmaker could cut its model line-up by up to half, decrease the number of options offered by up to 75% and reduce production capacity from 10 to nine million vehicles a year. And this could cost around 100,000 jobs.

“The global situation has continued to deteriorate over the past twelve months. That is why we are ​acting now,” said Volkswagen CEO Oliver Blume. Reuters‘ sources say the 58-year old is mulling closing four German plants (Hanover, Emden, Zwickau and Audi’s Neckarsulm site). Profit margins have halved between 2021 and 2025, while Volkswagen shares have lost over half of their value in the last three years.

Blume is under pressure not just from the labour reps but the Porsche and Piech owner families, whose core investments have lost tens of billions of euros in market value in recent years, Reuters reports.

Volkswagen Group to axe up to half of its models, cut annual production capacity by a million units – report

Volkswagen has not publicly said anything about potential job cuts nor factory closures, which triggered massive ​worker protests across company sites yesterday, according to the news agency. In Wolfsburg, around 400 workers blew whistles, waved ​red union flags and marched behind a banner reading ‘gemeinsam stark‘ (strong together).

Volkswagen works council head Daniela Cavallo said staff were not to blame for the sector’s crisis, and “great fear and deep uncertainty” were spreading across company factories and offices. The works council wants Blume to address speculation surrounding job cuts and plant closures by Friday, warning of more extraordinary staff meetings in the coming months otherwise.

The company faced mass strikes in December 2024, ​but there is currently an agreement for ⁠workers not to take industrial action while existing work contracts are in force.

Volkswagen Group to axe up to half of its models, cut annual production capacity by a million units – report

Under Blume’s last restructuring deal, unions secured a commitment from management ​to avoid German plant closures, prompting Volkswagen to seek alternative uses for under-utilised sites, including looking for a defence-sector partner for Osnabrueck and considering producing models for China in Germany.

Mobility Global data estimates that the group’s German car plants will operate at 81% of standard capacity in 2026, and that this could drop to 73% by end-2030 even after the anticipated removal of Osnabrueck. Zwickau is forecast to have the highest utilisation ⁠rate out of the four sites threatened with closure at 88% in 2026, and this could fall to 42% by 2030.

Volkswagens Touareg, Touran and T-Roc Cabriolet, Audis A1, Q2, TT, R8 and Q8 e-tron, and Porsches 718 Boxster, Cayman and the original Macan are already gone or going – what’s next?

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