Volkswagen to cut production and halve model lineup amid sales slump

Volkswagen's global vehicle sales fell 8.6% in the second quarter to just over 2.07 million units, with deliveries in China plunging 37%, as the German automaker announced a sweeping restructuring plan. The company said it will reduce production capacity by 25% to 9 million vehicles annually and halve its model lineup, with model complexity cut by up to 75%. Source: AP News

The numbers

In Q2 2026, the core VW brand saw a 14% drop in deliveries, Audi fell 8%, and Porsche plunged 18%. Source: La Vanguardia The sales decline was steepest in China, where fierce competition from local EV makers has eroded Volkswagen's market share. However, sales rose in the Americas and Europe. Source: AP News

The plan

The restructuring, approved by the supervisory board, includes 12 initiatives aimed at simplifying operations and cutting costs. CEO Oliver Blume said the plan makes the group "faster, more resilient, and more competitive." Source: ABC Volkswagen will focus on the most profitable market segments and reduce vehicle variants by 75%. Source: Portafolio The company did not provide new specifics on job cuts or factory closures, but reports suggest up to 100,000 jobs may be cut and four German plants could close. Source: Infobae

Labor and political backlash

Hundreds of workers protested at the Zwickau plant, and union IG Metall warned of "a major conflict" if the company proceeds with drastic cuts. Source: ABC The German government called on Volkswagen to act responsibly. The supervisory board, which includes union and state representatives, had previously blocked deep cuts, but the company now appears to move ahead with a leaner structure.