According to a report from German publication Handelsblatt, Volkswagen is also looking into producing its Chinese models, such as the ID. ERA 9X, in Europe to increase profitability of some of those plants.
Speaking to Auto Express at the Volkswagen ID. Polo’s Martorell factory in Spain in June, CEO Blume spoke about potential plans to combine with Chinese partners in Europe. “We, as a Volkswagen Group, have unique opportunities with our China footprint to bring them to Europe, but only in segments,” he said.
Blume added that another step could be to “partner with one of our [Chinese] partners. We are working together in China, but there are no talks, no ideas because we are focusing first on other industries and on our own product. And it hasn’t changed during the last weeks”.
As for saving money so far this year, Blume explained: “We achieved a cost reduction of over one billion compared to last year. And that’s a result of their agreements we made two years ago.
“Then we are making good progress in adapting the number of employees. We decided to reduce in Germany 50,000, and alone in Volkswagen, where we left 18,000 at the end term of this year.”
As for the VW Group’s model range, the brand has already spoken about a “realignment to sustainably strengthen its competitiveness”, which will see the cancellation of many current models and future development programmes from across the business, allowing for investment and resources to be focused on the core products that the company says will “more acutely benefit the customer”.
The plan also includes an even more intensive harmonisation of the group’s development programmes, further reducing the number of different platforms, electronic architectures and software landscapes.
By reducing complexity, VW says it will avoid parallel development programmes, but market diversity will remain, as it will retain two branches of its future development programmes split between the western and eastern hemispheres.
The group says these decisions are being forced upon it by intensifying challenges across global markets, driven largely by extra costs for its American business due to tariffs, as well as heightened competition from new-age Chinese brands and unstable geopolitics.
In 2023, CEO of the Volkswagen brand, Thomas Schaffer, famously said that VW’s roof was on fire, but after years of consolidation and a new product wave later confirmed to Auto Express that while the fire was still smoldering, the worst was past. Now, though, with problems extending beyond VW into other brands, that fire might have been reignited.
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