Volkswagen AG will reduce its global production capacity to 9 million vehicles per year, cutting it by another 1 million units. Company head Oliver Blume said that the previous target of 12 million vehicles no longer matches demand. Since 2020, the group has been unable to consistently exceed the level of 10 million sales.
The capacity reduction is accompanied by pressure on employment. The company has already reduced production in China and is preparing additional measures in Europe. Key brands, including Audi, are involved in the process.
Earlier, Volkswagen announced a 20% cost-cutting program. Its implementation was accelerated amid a drop in profitability to 2.8% and declining demand for traditional models.
According to Blume, the market is being affected by tariffs in the United States, competition in China, the contraction of the European market, and the conflict in the Middle East. He emphasized that excess capacity has become a long-term problem, and previous growth plans are unrealistic.
The company is adapting its strategy by reducing its model range and revising investments. Against the backdrop of underutilized electric vehicle plants and slowing expansion, Volkswagen is shifting to optimization instead of expansion.
Read more materials:
- Helium shortage: why EVs are under threat again, and the market is shifting toward hybrids
- Renault and Geely unveiled the X-Range C15 hybrid platform, allowing electric vehicles to be turned into PHEVs with minimal modifications
- FIA updated the "Formula 1 2026" rules after the first three races
