Volkswagen begins industrial transformation wider than its history. end of the supervisory board meeting in Wolfsburg, the German group announced a profound simplification of the range, reduction in global production capacity and a comprehensive review of its structure. The CEO Oliver flower he defined the project as “the largest reorganization in the group's history“The plan envisages a reduction of up to 50% in the number of models and an even more significant reduction in trim levels, which could decrease by up to 75%.
Volkswagen also wants to bring its global production capacity back to around 9 million vehicles per year, compared to the 12 million for which the group was structured before the pandemic. However, there are still without an official response the most delicate issues remain, from possible German plant closures to the impact on employment.
Volkswagen: Fewer models and a simpler range
The core of the project is the reduction of complexityVolkswagen now has about 150 models distributed among brands such as Audi, Porsche, Skoda, Seat, Cupra, Bentley, and Lamborghini. A very broad range, accompanied by numerous configurations and equipment options, which over time has increased development costs and made production processes more complex. The group now aims to concentrate resources and investments on segments considered more profitable and on technologies with greater strategic value. The number of models could be halved, while the variety of trim levels would be reduced by up to three-quarters.
La reorganization will also affect the technological platforms, the electronic architectures and with . The goal is limit overlaps between brands, increase synergies, and accelerate new product development. Volkswagen also intends to further differentiate its solutions for Western markets from those designed for China and other Asian countries, where competition from local manufacturers is exerting increasing pressure.
"With our plan for the future, we are making the group even more solid and competitive, even in an extremely challenging global environment," Blume said. The CEO explained that the project aims to limit risks, make better use of the group's strengths and send "a clear signal of renewal for Germany as an economic hub".
Volkswagen: Production capacity drops to 9 million cars
The transformation also passes through a downsizing of the industrial structureVolkswagen was set to produce around 12 million vehicles a year before the pandemic, while it was still aiming for volumes close to 10 million until 2025. The new target is around 9 million cars per year. The group claims to have already eliminated capacity for around 2 million vehicles, but further measures are planned, especially in Europe and China.
The decision reflects the deterioration of the global automotive market. Volkswagen faces slowing demand, growing competition from Chinese manufacturers, rising manufacturing costs, and the need to simultaneously finance the electrification transition, software development, and product lineup renewal.
In the first quarter of 2026 the Group profits fell by 28%, at 1,6 billion euros, while sales had already fallen by 2%. Results were also impacted by the 25% tariffs imposed by the United States on cars produced abroad, particularly significant for brands like Porsche and Lamborghini.
Volkswagen: Factories and employment issues remain unresolved.
The plan presented by the group does not yet contain precise indications on the new staff cuts or on the possible closures of German factoriesFor weeks, rumours have been circulating involving the sites of Emden, Zwickau, Hannover and Neckarsulm, to which Osnabrück could be added. The hypotheses speak of a overall reduction The workforce of between 50 and 100 people will be reduced through layoffs, agreed-upon exits, and early retirements. The reduction in production capacity, however, likely impacts employment and the industrial network. The group employs over 650 people worldwide and more than 250 in Germany. Including related industries, approximately 3 million workers depend on the German automotive industry. Therefore, Volkswagen's restructuring not only concerns the future of the company, but also represents a national economic and political issue.
Before and after the supervisory board meeting, Workers demonstrated at 18 German locationsIG Metall criticized the lack of clarity regarding the fate of the plants and demanded immediate answers from management. The chairwoman of the works council, Daniela Cavallo, asked Blume to clarify rumors about closures, cuts, and possible changes to the Volkswagen Law. Otherwise, extraordinary meetings could be called across the group after the summer break. "Enough is enough. This is the straw that breaks the camel's back," Cavallo declared, accusing management of having exceeded "all bounds of respect" for workers.
Volkswagen: Deliveries drop, China plunges 26%
I commercial data published by the group show the pressure that is pushing Volkswagen towards reorganization. In the first six months of 2026, manufacturer delivered 4,13 million vehicles worldwide, 6% less than to 4,41 million in the same period in 2025.
Growth in South America, where deliveries increased by 8%, Western Europe, up by 3%, and Central and Eastern Europe, up by 7%, was not enough to offset the 26% collapse in ChinaIn North America, after a positive second quarter that closed with 8% growth, the first six months remained slightly negative, with a 3% decline. "The situation in China remains challenging, where we were unable to avoid a significant overall market decline of approximately 20%, despite the initial positive momentum of our recently introduced, locally developed electric vehicles," he stated. Marco Schubert, member of the Extended Executive Committee responsible for sales.
Global deliveries of battery-electric vehicles also suffered a setback. Between January and June, they totaled 438.500 units, 6% less than the 465.600 units in the same period the previous year. However, the picture remains uneven across regions. In Europe, Volkswagen maintains its leadership in the electric car market and recorded 8% growth, increasing its share in Western Europe from 20% to 21%. In the United States, however, electric vehicle deliveries decreased by 69%, penalized by the end of government support programs and increased customs duties. positive signal comes from European ordersIn the second quarter, demand for electric cars increased by more than 50% compared to the same period the previous year. The new family of urban vehicles, consisting of the Volkswagen ID. Polo, Skoda Epiq, and Cupra Raval, received over 54 orders.
Considering all engine variants, order intake increased by 4%, while the overall backlog grew by approximately 12% compared to the end of 2025. The share of electric vehicles in the order backlog exceeded 30%.
Volkswagen has thus defined the direction of its transformation, but not yet all of its implications. It remains to be seen how severe the cost will be for plants and jobs.
