Volkswagen Group is considering cutting its annual production capacity to about 9 million vehicles.
Chief Executive Officer Oliver Blume said in an interview with German business outlet Manager Magazin on April 21 (local time) that “it is difficult to maintain excess capacity over the long term,” adding that the company is reviewing an additional reduction of up to 1 million vehicles to reflect market conditions.
Volkswagen’s capacity was about 12 million vehicles in 2019, before the pandemic. Since then, it has scaled back by roughly 1 million vehicles each in China and Europe. If the latest plan is carried out, total capacity would be down about 25% from 2019.
Sales have also weakened. Global deliveries fell from 10.97 million vehicles in 2019 to about 8.98 million last year. Blume said the market environment has “completely changed” since the pandemic and that around 9 million vehicles is becoming the new baseline.
How the cuts would be implemented has not been decided. Blume said there are “various options” beyond plant closures, but added that the company is reviewing “every cost item,” leaving open the possibility of further job cuts.
Volkswagen is already pursuing a major restructuring in Germany, including halting production at two of its 10 domestic plants and planning to cut up to 50,000 jobs by 2030.
Some sites are being repurposed. The Dresden plant, which stopped production in December, is to be used for artificial intelligence and robotics research. At the Osnabrueck plant, a possible acquisition by a defense contractor and others is under review. Lower Saxony’s state government, Volkswagen’s second-largest shareholder, has also recently proposed joint production with a Chinese company as one option for using the facilities.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.