Cars are parked in fron of the Zwickau Volkswagen Plant on July 9, 2026 at the Zwickau, eastern Germany.<\/p>\n
Jens Schluter | Afp | Getty Images<\/p>\n
Volkswagen<\/a>‘s management plans to drastically reduce its model lineup and further cut capacity, although the German auto giant stopped short of announcing any job cuts following tense stakeholder talks.<\/p>\n Europe’s largest automaker on Thursday said<\/a> the model lineup will be gradually cut by up to half over the coming years as it concentrates on the most attractive market segments. <\/p>\n Production capacity, meanwhile, will be reduced to nine million vehicles per year, compared to a goal of 12 million before the coronavirus pandemic.<\/p>\n “With our future plan, we are moving into the next phase of transformation by our own means,” Volkswagen CEO Oliver Blume said in a statement. <\/p>\n “We are making the Volkswagen Group faster, more resilient and more competitive,” he added. <\/p>\n The update followed a high-stakes boardroom showdown<\/a> with the group’s supervisory board on Thursday and comes after reports<\/a> that the company is weighing up shutting four German factories and implementing as many as 100,000 job cuts. <\/p>\n The mass layoff plan, which would represent the most radical overhaul in the firm’s nearly 90-year history, is staunchly opposed by German lawmakers and powerful labor unions. <\/p>\n The auto giant had already\u00a0laid out plans<\/a>\u00a0to implement sweeping job cuts and launched a major product offensive, seeking to counter pressures ranging from\u00a0U.S. import tariffs<\/a>\u00a0to\u00a0intensifying competition<\/a>\u00a0from Chinese car brands.<\/p>\n Volkswagen employees are taking part in an information and protest event organized by IG Metall in front of the VW plant in Zwickau.<\/p>\n Picture Alliance | Picture Alliance | Getty Images<\/p>\n The latest reported layoffs, however, would be double the 50,000 job cuts previously announced and now purportedly include the closure of four German plants: Hanover, Zwickau, Emden, and the Audi facility in Neckarsulm. The plans were first reported by Manager Magazin late last month.<\/p>\n Analysts at Jefferies said on Thursday that Volkswagen’s rescue plan provided “limited new information” and “no indication of progress” toward an agreement having been reached on either plant closure, a five-year investment plan or additional headcount reduction up to 100,000.<\/p>\n ‘A perfect storm’<\/p>\n Volkswagen’s General Works Council and German industrial union IG Metall have pledged to push back against the reported job cuts and plant closures. A protest organized by IG Metall took place on Thursday outside Volkswagen’s plant in the German city of Zwickau. <\/p>\n Shares of Volkswagen were last seen trading 0.6% higher on Friday morning. The stock, which has recently been trading at levels not seen since the summer of 2010, is down more than 30% so far this year.<\/p>\n “If you look at the stock price, it tells you a story,” Henning Gebhardt, partner and fund manager at HollyHedge Consult, told CNBC’s “Europe Early Edition<\/a>” on Friday. <\/p>\n “Volkswagen is in a perfect storm: Competition from Chinese competitors is very high so there’s no real profit from China, you have tariffs, you have other competitors which are actually having a nice offering, which Volkswagen at the moment doesn’t have, and then generally speaking, the auto industry is under pressure,” Gebhardt said. <\/p>\n