Volkswagen has announced plans to reduce its global vehicle line-up by up to 50% as part of a wide-ranging strategy to cut costs, simplify operations and strengthen its competitiveness by 2030.
The German automotive giant unveiled a package of 12 strategic initiatives and a new target framework to its supervisory board, outlining how it intends to reshape the business as the global automotive industry undergoes significant change. While recent media reports suggested Volkswagen could cut up to 100,000 jobs and close four European factories by the end of the decade, the company made no mention of potential plant closures or workforce reductions in its announcement.
Instead, Volkswagen said it is focusing on reducing complexity across the business, streamlining its product portfolio and aligning development, technology and production more closely with the needs of regional markets.
As part of the strategy, the company’s vehicle range will be gradually reduced by up to 50%, with greater emphasis placed on its strongest-performing market segments. Available trim levels and equipment variants will also be cut by as much as 75%, helping to simplify production and lower costs.
Volkswagen is also combining its technology divisions, including vehicle platforms, electronic architecture and software, to create shared systems for western and eastern markets. The move is expected to improve efficiency, reduce duplication and unlock greater synergies across the group.
The company is continuing to scale back production capacity to better match global demand. Its cross-brand annual production target now stands at around nine million vehicles, compared with almost 12 million before the COVID-19 pandemic. Volkswagen said it has already reduced capacity by around two million vehicles, with further cuts planned across its operations in Europe and China.
According to the company, the past three years have seen significant structural reforms under its annual Top-10 strategy programmes, alongside a broad technology transformation. Volkswagen said it has met its key objectives across products, technology and regional operations, in some cases ahead of schedule, despite geopolitical and economic challenges.
The group is also reviewing its investment portfolio to improve returns and strengthen its financial position. It highlighted the agreement reached in late June to sell a majority stake in Everllence, a deal expected to generate approximately €7.4 billion (£6.4 billion) in cash proceeds.
Volkswagen said the latest measures are designed to make the business more resilient and better positioned for long-term growth as the automotive sector continues to evolve.
Volkswagen Group CEO Oliver Blume said: “With our future plan, we are moving into the next phase of transformation by our own means. We are making the Volkswagen Group faster, more resilient and more competitive: through less complexity, focused technologies, an even stronger alignment of products, development and production with regional markets, the reduction of overcapacities, a streamlined equity portfolio and significantly leaner structures.”
