VOLKSWAGEN EYES GERMAN PLANT CLOSURES, 40,000 JOBS AT RISK AS CHINESE AUTOMAKERS GAIN GROUND

Thu 09 July 2026:

Volkswagen is preparing a sweeping restructuring that could shut down production at multiple German factories, putting about 40,000 jobs at risk, media reported Thursday.

Citing sources on the company’s supervisory board, the weekly Der Spiegel said CEO Oliver Blume intends to end vehicle production at the Zwickau and Emden plants within five years. The commercial vehicle factory in Hannover would follow in 2032, and Audi’s plant in Neckarsulm in 2034, the report said.

Closing the plants at Hanover, Zwickau, Emden and Audi’s Neckarsulm site would put more than 45,000 jobs at risk, according to the people. That would add to the 50,000 cuts that are currently planned.
In absolute terms, laying off 100,000 people and axing four assembly plants would be the largest restructuring in automotive industry history.

It would be comparable to major shake-ups by GM leading up to and during its ⁠2009 bankruptcy and in the early 1990s when it cut as many as 74,000 jobs over four years and shut or idled 21 plants.

Volkswagen CEO Oliver Blume presented the plans to senior executives earlier this week to rally support for deep cuts likely to face fierce resistance from unions and the state of Lower Saxony, the carmaker’s second-largest shareholder.

The proposals, described by analysts as the most radical overhaul in the history of the world’s second-largest automaker, were set to be discussed at a supervisory board meeting in Wolfsburg on Thursday.

Germany’s powerful IG Metall union swiftly condemned the plans and called for a day of action, with a rally scheduled in Wolfsburg during the board meeting.

The overhaul was first reported by Manager Magazin, which also said the world’s No. 2 automaker would cut investment by about 15% to just over €130 billion ($148 billion) over the next five years.

Blume and Chief Financial Officer Arno Antlitz aim to fundamentally restructure the 89-year-old company, including spinning off the core VW brand and parts operations into separate entities, the magazine added, citing sources.

Last month, Volkswagen shares were trading at 16-year lows, down 3.4% at 1335 GMT, suggesting investors were sceptical the plan would succeed.

“The high costs are merely a symptom, not the cause. They do not address the root cause, which is weak sales,” Ingo Speich of Volkswagen shareholder Deka told Reuters.

“VW must bring attractive products to market that are in high demand; that would put an end to the debate over costs.”

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Massive pressure from rising Chinese rivals

The move comes as the carmaker faces mounting pressure from Chinese rivals, stiff tariffs on car imports into the United States, as well as dwindling demand in Europe, which the company has said makes its business model unsustainable.

Major automakers have steadily lost ground to locally produced EVs in China. According to AlixPartners, non-Chinese automakers’ market share fell to 32% in 2025 from 57% in 2020.

Having been China’s top automaker for years, Volkswagen was knocked into second place by BYD in 2024 and fell to third place in 2025.

That decline ⁠has now spread to premium automakers like BMW which issued a shock profit warning last week blamed partly on weak sales in China.

Chinese automakers are also expanding into emerging markets and are growing rapidly on Volkswagen’s home turf in Europe.

BYD, Chery SAIC and Leapmotor doubled their combined European market share through May from a year ago, according to ACEA.

Dozens more Chinese automakers have launched or plan to launch in Europe soon.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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