GoKawiilVolkswagen is planning to cut its model line-up in half, as part of Europe's largest automaker's huge efficiency overhaul. The Volkswagen Group's future plans were outlined in a press release cosigned by its Executive Board, in which it also pledged to reduce its production capacity to nine million vehicles per year, down from 12 million pre-COVID-19. A reduction of two million units has already been made. The company blames the "changed global market environment" (aka tariffs) and intensifying global competition.
In its effort to transform Volkswagen into "the most attractive automotive company in the word" by 2030, the model lineup will gradually be "streamlined" by up to 50 percent, with its focus shifting to the most profitable market segments. The automaker's offering complexity will also be reduced by up to 75 percent, so you can expect fewer equipment options when purchasing a VW vehicle.
Volkswagen says it will merge its tech-focused divisions of software, platforms and electronic architectures to serve both its eastern and western markets. The goal here is to unlock company-wide synergies that boost efficiency, while eliminating "technological parallel structures."
"Despite the progress achieved, the cost reductions planned to date under the agreed programs are not sufficient in the current economic and geopolitical environment," said Volkswagen Group CFO Arno Antlitz. "We must instead fundamentally realign our business model and achieve structural, sustainable improvements."
This fundamental realignment doesn't mention layoffs, but the announcement comes after reports surfaced that the European giant plans to cut 100,000 jobs, equating to 15 percent of its global workforce at German plants in the coming years. The cuts would also see Volkswagen close a number of factories in what would be the biggest overhaul in its 89-year history.
Earlier this week, the German metalworkers' union, IG Metall, organized protests at 18 VW sites, including one outside its Wolfsburg HQ. As reported by The Guardian, the chair of the union, Christiane Benner, said the demonstrations sent a "clear signal to the board" in the wake of its large-scale restructuring plans.