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Volkswagen is to carry out a radical restructuring of its business with a reduction of its model line-up by as much as 50% and a cut in production capacity to nine million vehicles a year.
The move was announced by the board in the face of growing competition from Chinese competitors and high cost of production.
At a meeting last week, it said: “The model lineup will be gradually concentrated on the most attractive market segments and streamlined by up to 50%; offering complexity will be reduced by up to 75%.
It added that production capacities were being “adjusted” to the changed global market environment and the sharply intensified competition, targeting 9 million vehicles per year.
The move has been widely reported to translate into plant closures and an additional 50,000 redundances on top of the 50,000 already announced.
Volkswagen also said it was focusing on its core automotive business, citing the sale of its 51% majority stake in its heavy engine and turbomachinery division, Everllence (formerly MAN Energy Solutions), to the private equity firm Bain Capital.
CEO Oliver Blume: “By 2030, we will make the Volkswagen Group 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. With our future plan, we are now entering the next phase of transformation.”
