Blume is battling to streamline Europe’s biggest carmaker, whose profits have slumped as it faces billions of euros in tariff costs, stiff Chinese competition, and pressure on its domestic manufacturing network to become more efficient.

Volkswagen has ⁠already agreed to cut 50,000 jobs across the group, including its Porsche and Audi subsidiaries.

“The company must work on reducing costs further, having calculated a cost disadvantage versus comparable companies of 20%. This means a theoretical deduction of another 50,000 jobs worldwide. We are currently assessing across all brands, companies, and regions how many adjustments are actually necessary and feasible,” Blume said in the memo seen by Reuters.

The organizational restructuring plan has faced angry reactions from workers. As per the reports, during the last board meeting on July 9, labor representatives on the committee blocked the proposals, which, apart from job cuts, also pitched for the closure of four factories.

However, Blume has sounded undeterred in the latest memo, as he mentioned, “As of today, we still cannot confirm competitive use cases for the plants of Emden, Hanover, Zwickau, and Neckarsulm in the 2030s.” But he is now preferring “intelligent solutions” over ⁠closures, having pointed to the defense industry or the production of Chinese Volkswagen models in Europe as options for underutilized factories.

The ⁠company will further reduce its production capacity and gradually halve its model lineups—measures that analysts have still found inadequate for solving Volkswagen’s current woes.

“Of course, it’s understandable that not everything has been planned ⁠out down to the last detail yet and that certain issues still need to be further discussed and evaluated. There will certainly be more meetings in which we will work hard to find the best solutions,” Blume said.

As per the German business magazine Capital, the state of Lower Saxony is considering ‌taking a stake in Volkswagen’s Osnabrueck plant, a move through which the provincial administration hopes to support the plant’s transition from automotive to defense production. Volkswagen sees the transition method as the viable one for other plants, whose ‌future ⁠is under discussion.

Volkswagen has been in talks with defense companies, including Israel’s Rafael, over future prospects ⁠for Osnabrueck, where production is currently scheduled to end in 2027. To complicate things further, Volkswagen has posted an 8.6% drop in deliveries in the ⁠second quarter, the steepest fall in the automaker’s history in the last four years.

Post the board meeting, Volkswagen made no mention of job cuts or plant closures. Instead, it reiterated largely known targets to reduce complexity, measures that did not require supervisory board approval.

The model range, which spans roughly 150 lines across brands including Audi, Porsche, Skoda, and Cupra, would be gradually trimmed in the pursuit of focusing on the “most attractive market segments.” Production capacity will be reduced to nine million vehicles a year, down from 10 million currently and well below a pre-pandemic target of 12 million. So-called offering complexity, including equipment options, will be cut by up to 75%.

Germany’s largest industrial union, IG Metall, has been rallying workers at Volkswagen Group sites across Germany, urging management to present a strategy that safeguards production. While Volkswagen’s current labor agreement includes a truce against organized strikes, unions are now threatening to step up industrial action if management seeks to reopen commitments on job security.

However, the silver lining here has been both sides agreeing to the challenges the group is facing, including a severe reduction of profit margins, weakness in China, ⁠and the costs of electrification and tariffs. Reiterating that the global situation for the carmaker has been a deteriorating one over the past twelve months, Blume wants the company to become faster, more resilient, and more competitive.

Data seen by Reuters shows Volkswagen’s German plants operating at 81% of standard capacity in 2026, a figure expected to fall to 73% by the end of the decade. Zwickau, among the sites earmarked for possible closure, will likely see utilization drop from 88% this year to 42% by 2030.

Henning Gebhardt, a fund manager at HollyHedge Consult, said Volkswagen faced a “perfect storm” of weak Chinese profitability, tariffs, and stronger rival offerings, compounding pressure across the wider auto industry.

The post Volkswagen CEO doubles down on job cuts, weighs ‘intelligent’ plant overhaul appeared first on International Finance.

After serving as Skoda’s largest market for years with deliveries of over 300,000 between 2016 and 2018, sales in China collapsed to just 15,000 in 2025, as foreign automakers face tough competition from local brands, especially in the EV domain. The 2025 figures also resulted in a sales decline of more than 95%, which reduced the brand’s market share to below 0.1%.

“The company will continue to sell Skoda models in the Chinese market in collaboration with a regional partner until mid-2026,” Volkswagen said in a statement, while announcing the automaker’s next focus area: strengthening the brand’s presence in India and Southeast Asia, where it saw growth ‌in ⁠2025.

“After-sales services for Skoda vehicles will continue to be provided in China,” the company said.

Skoda’s move isn’t surprising, given that its parent Volkswagen has been facing a tough time in China, where local brands BYD and Geely have overtaken the German company in terms of sales. Not only Volkswagen, but almost all Western legacy carmakers have also been struggling to keep up in a growing EV market, with Chinese companies excelling in terms of introducing cost-friendly, yet feature-laden cars.

Volkswagen, however, along with its subsidiary Audi, is still holding ground in the world’s second-largest economy through product launches and increasingly localised production activities.

Volkswagen Group CEO Oliver Blume recently told German newspaper Bild am Sonntag that Germany could learn from China’s industrial policy approach, when it comes to reforming both the European country’s automobile sector and the broader domestic economy.

“The Chinese take a very systematic approach with so-called five-year plans and have clear priorities with that too. It’s optimally structured. And what we find very positive in China is a high level of discipline and willingness to implement these initiatives,” he said, while adding that in the Asian country, Volkswagen currently faces “over 150 competitors ⁠and strong innovation dynamics.”

The post Skoda retreats as Chinese EVs dominate appeared first on International Finance.

AUDI

• Foundation year: 1909
• Number of UK models: 65
• Number of employees: 90,705
• Sales in 2017: 174,982
• Market share in 2017: 6.89%

Audi became part of the Volkswagen Group back in 1965. This was when Audi acquired the Auto Union GmbH from Daimler-Benz. For the first time since the end of the Second World War, Audi vehicles were produced thanks to this subsidiary. With more than 100 markets across the globe, Audi now stands as one of the leading premium car brands. This is, in part, down to Audi’s revolutionary technology. From piloted driving to an AI setup, the German manufacturer is leading the way to the future of driving technology.

BENTLEY

• Foundation year: 1919
• Number of UK models: 18
• Number of employees: 4,332
• Sales in 2017: 1,753
• Market share in 2017: 0.07%

Volkswagen and Bentley’s ties date back to 1998, though the partnership is quite complex. The story starts in 1997, when the then-owner of Bentley put Rolls-Royce Motors up for sale. Unsurprisingly, BMW made an offer of £340 million, as they supplied Bentley and Rolls-Royce with components and engines anyway. Plus, Vickers and BMW shared common ground in their experience in aerospace manufacturing.

But BMW weren’t the only bidders; Volkswagen made an offer of £430 million, outbidding BMW. But the deal didn’t give Volkswagen ownership of everything. Their bid secured the administrative and production facilities, vehicle designs, model nameplates, the iconic Spirit of Ecstasy, and the Rolls-Royce grille shape trademark. But Rolls-Royce Holdings retained the Rolls-Royce name and logo.

A year later in 1998, BMW supplied Bentley and Rolls Royce with new components for their cars and paid £40 million to licence the Rolls-Royce name and logo. After extensive negotiations from all parties, they reached an agreement that allowed BMW to continue with the deal to supply components and engines. Volkswagen attained the rights for the logos and names at this time. Then, in 2003, Volkswagen became the sole providers of Bentley cars, and BMW attained Rolls-Royce.

BUGATTI

• Foundation year: 1909
• Number of UK models: 1
• Number of employees: 302
• Sales in 2017: N/A
• Market share in 2017: N/A

Art and technology were the forefront of car manufacturer Bugatti’s aims. In the last 100 years or more, Bugatti has unveiled some of the motor industry’s most interesting car designs.

In 1998, Volkswagen purchased the rights to manufacture Bugatti-named cars. Two years later, Bugatti was officially inducted into the Volkswagen Group. Plus, the guest house that was previously owned by Ettore Bugatti himself was purchased by Volkswagen Group. The house was turned into the company’s headquarters.

LAMBORGHINI

• Foundation year: 1963
• Number of UK models: 8
• Number of employees: 1,606
• Sales in 2017: N/A
• Market share in 2017: N/A

Not only did Volkswagen acquire Bentley and Bugatti in 1998, but they also brought Lamborghini into the family. The super sports car icon that stunned the world with gorgeous designs and exceptional power used to be owned by MegaTech. MegaTech in turn were owned by SEDRCO pty, an Indonesian corporation.

But a financial crisis sparked in Asia in 1998, which meant Lamborghini needed to change its owner. An estimated $110 million offer saw the super sports car manufacturer purchased by Volkswagen. In the following months, a restructuring took place to make the holding company Lamborghini Holding S.p.A.

PORSCHE

• Foundation year: 1931
• Number of UK models: 37
• Number of employees: 27,352
• Sales in 2017: 14,051
• Market share in 2017: 0.55%

It took three years for Volkswagen to fully bring Porsche into the Group.

Starting in 2009, the Volkswagen Group purchased a stake in Porsche AG, taking the first of many steps towards an ‘integrated automotive group’ with Porsche. Two years later, the two companies were meant to merge. But this was halted by legal risks, and the merger was deemed impossible.

As another year passed, however, Volkswagen announced they were currently in the process of purchasing the rest of the shares in Porsche for €4.46 billion. Porsche was finally brought into the Volkswagen Group in its entirety in August 2012.

SEAT

• Foundation year: 1950
• Number of UK models: 24
• Number of employees: 14,716
• Sales in 2017: 56,130
• Market share in 2017: 2.21%

Volkswagen first set their sights beyond Germany with its co-operation agreement with Spanish company SEAT. Signed in 1982, the two companies quickly went to work, with 1986 seeing Volkswagen gaining a 51% controlling stake in SEAT. With this, SEAT became the first non-German subsidiary in the Volkswagen group. The stake was increased from 51% to 75% in December 1986.

Then, in 1990, Volkswagen Group purchased SEAT in its entirety.

ŠKODA

•  Foundation year: 1895
• Number of UK models: 27
• Number of employees: 32,985
• Sales in 2017: 79,758
• Market share in 2017: 3.14%

The 1990s were a big year for acquisitions for Volkswagen, as the Group brought in Bentley, Bugatti, Lamborghini, and ŠKODA.

In 1991, Volkswagen and ŠKODA made a partnership agreement that resulted in Volkswagen gaining a 30% stake in ŠKODA. This later increased to 60.3% in December 1994, and then again to 70% in 1995.

By 2000, ŠKODA became wholly owned by the Volkswagen Group. The partnership was certainly beneficial to both parties, as the Czech car manufacturer saw deliveries increase sevenfold thanks to their partnership with Volkswagen.

THE VOLKSWAGEN GROUP

• Collective years of experience: 731 years
• Number of UK models: 213
• Number of employees: 372,264
• Sales in 2017: 535,136
• Market share in 2017: 21.0 7%

• Volkswagen themselves were founded in 1937, with 33 models available in the UK and employing 200,266 people of their own. In 2017, Volkswagen enjoyed 208,462 sales and an 8.21% share in the market. The data and figures in this article were correct as of August 2nd 2018.

This piece was curated by Vindis

The post Unravelling the Volkswagen Success Story – Who Do they Own? appeared first on International Finance.