BERLIN: Volkswagen is considering shutting four German factories and ramping up job cuts to as many as 100,000, two people familiar with the matter said on Friday, in what could be the biggest overhaul in the carmaker’s history.
Members of Volkswagen’s supervisory board have been informed of the plans, which are due to be discussed at a July 9 meeting, the people said, as the carmaker faces mounting pressure from Chinese rivals.
Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here.
Closing the plants at Hanover, Zwickau, Emden and Audi’s Neckarsulm site would put more than 45,000 jobs at risk, according to the people. That would add to the 50,000 cuts agreed with unions in late 2024.
Oliver Blume, who became Volkswagen CEO nearly four years ago, presented the plans to senior executives earlier this week as he seeks to align management behind deep cuts likely to face strong resistance from unions and the state of Lower Saxony, which is the carmaker’s second-largest shareholder.
The overhaul was first reported by Manager Magazin.
The world’s No. 2 automaker would also cut planned investment by about 15% to just over €130 billion ($148 billion) over the next five years, the magazine said.
Blume and Chief Financial Officer Arno Antlitz aim to fundamentally restructure the 89-year-old company, including spinning off the core VW brand and parts operations into separate entities, the magazine added, citing sources.
‘FAR-REACHING’ CHANGE NEEDED, SAYS VW
A Volkswagen spokesperson declined to comment on “confidential documents.”
“The entire group, including its brands and subsidiaries, must undergo far-reaching change,” the spokesperson said.
VW’s works council and Germany’s powerful IG Metall union vowed to resist any such measures, saying in a joint statement on Friday: “Should such plans go ahead, we would do everything in our power to prevent them.”
Porsche SE, the investment vehicle of the Porsche and Piech families and Volkswagen’s biggest shareholder, declined to comment.
In its 2025 financial year, the group’s global workforce was 667,164, with almost 43% employed in Germany.
VW’s shares were trading at 16-year lows on Friday morning, down 0.4% at 1024 GMT, suggesting investors were sceptical the plan would succeed.
MASSIVE PRESSURE FROM RISING CHINESE RIVALS
Blume is under pressure to revive Volkswagen’s fortunes as it battles tariffs, a costly shift to electric vehicles and growing competition from Chinese automakers, perhaps its biggest threat.
Major automakers have steadily lost ground to locally produced EVs in China. According to AlixPartners, non-Chinese automakers’ market share fell to 32% in 2025 from 57% in 2020.
Having been China’s top automaker for years, Volkswagen was knocked into second place by BYD in 2024 and fell to third place in 2025.
That decline has now spread to premium automakers like BMW (BMWG.DE), opens new tab, which issued a shock profit warning last week blamed partly on weak China sales.
Chinese automakers are also expanding into emerging markets and are growing rapidly on Volkswagen’s home turf in Europe.
BYD (002594.SZ), Chery (9973.HK), SAIC (600104.SS), and Leapmotor (9863.HK), doubled their combined European market share through May from a year ago, according to ACEA data, and dozens more Chinese automakers have launched or plan to launch in Europe soon.