Volkswagen CEO Oliver Blume is signaling further capacity reductions. "We are currently looking at up to an additional million in capacity to reflect the global market situation," Blume told "Manager Magazin" on Tuesday. He noted that past volume planning is unrealistic in the current market and competitive environment. Volkswagen has already reduced its annual production capacity in China by one million cars. In Europe, capacity is also expected to decrease by one million vehicles annually by 2028, primarily at Volkswagen and Audi, Blume announced. "This will bring us down from a total invested capacity of over twelve million to a sustainable nine million vehicles per year."

At the end of 2024, Volkswagen reached an agreement with the works council to cut 35,000 jobs in Germany. In total, 50,000 jobs will be eliminated across the Group, which includes the Audi and Porsche brands alongside the Volkswagen marque, by 2030. Blume stated that Volkswagen is currently making unprecedented progress in reducing factory costs. "Nevertheless, we continue to be burdened by excessive capacities, which ultimately cost a lot of money. We must develop a suitable way to deal with this."

The Wolfsburg-based automaker is responding to the decline in sales seen in recent years. Since the Covid crisis, around nine million cars have been sold annually worldwide, compared to eleven million in the pre-crisis year of 2019, Blume said. VW aims to grow again through the momentum of its products. "But we cannot rely on that in the current global situation."

In the U.S., Blume expressed openness to collaborating with partners for the new Scout brand. This would be a matter of risk mitigation, the executive said, adding that no decision has yet been made. Scout CEO Scott Keogh recently floated the idea of an IPO in an interview with the "Financial Times." Volkswagen is currently building a new plant in South Carolina for the brand.

(Report by Christina Amann, edited by Ralf Banser. For inquiries, please contact our editorial office at Berlin.Newsroom@thomsonreuters.com (for politics and economics) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)