The Volkswagen Group plans to slash its global model lineup by up to 50 percent and reduce equipment options by as much as 75 percent as part of a sweeping restructuring program aimed at countering rising costs.
The plans, revealed by the Volkswagen Group supervisory board, represent a dramatic scaling back of the growing number of models across the company's 10 brands, which currently includes Volkswagen, Audi, Porsche, Skoda, Seat, Cupra, Bentley, Lamborghini, Scout and the Ducati motorcycle brand.
The move comes as the German car maker grapples with high costs, excess production capacity at home, rising competition in China and the impact of U.S. tariffs. Profit margins have posted a steep decline, to less than half of what they were in 2025 versus 2021.
In parallel, annual production capacity will be reduced to approximately 9 million vehicles, down from the current 10 million. Prior to the COVID-19 pandemic, the group had invested for production capacity of around 12 million cars and has already cut 2 million units.
"We must fundamentally realign our business model and achieve structural, sustainable improvements," said Arno Antlitz, the group's chief financial officer. "This includes improving the cost structure of our vehicles without compromising product substance, significantly reducing overhead costs, increasing the efficiency of our plants and accelerating technology development and decision-making."
Volkswagen Group CEO Oliver Blume said the global situation had "continued to deteriorate over the past twelve months." In a video message to staff, he acknowledged that Germany remained the group's "central industrial location" but warned that the country's advantages alone were no longer sufficient in global competition.
The announcement triggered protests across Volkswagen sites in Germany, with thousands of workers demonstrating against the planned cuts.
The restructuring extends beyond product lines. The group plans to create greater economies of scale by introducing shared platforms, electronic architectures and software across models sold in different regions, a move that hints the Volkswagen brand could use technology developed in partnership with Xpeng for models sold in Europe and other markets.
The equity and investment portfolio is also being streamlined, with the Volkswagen Group agreeing to divest a majority stake in heavy marine engine company Everllence, which was formerly known as MAN Energy Solutions, at the end of June. That will generate approximately €7.4 billion ($8.4 billion) to strengthen the balance sheet.
Despite the cuts, the Volkswagen Group board has voted against German manufacturing plant closures.
In an address to Volkswagen workers in Germany on Monday, Blume confirmed plans to eliminate a further 50,000 jobs worldwide, describing the measures as "the most comprehensive realignment in the company's history.”
Looking ahead to 2030, Blume said the group's goal was to become "the most attractive automotive company in the world — with iconic brands, inspiring products, leading technologies, robust financial results, reliable capital market performance and a team spirit in action."
