The declaration from Thomas Schaefer, Volkswagen’s brand head, came amid German auto workers conducting nationwide protests after the automaker’s profit warning highlighted sectoral challenges from high costs and fierce Asian competition.

The protests at Volkswagen, BMW and parts supplier Bosch have emerged in response to painful job cuts, possible production relocations and even plant closures for Germany’s most important industry in a crisis that has also become a crucial election issue in the European country.

“I had hoped that the measures agreed in 2024 would ⁠already be sufficient. Unfortunately, that has not been the case,” Schaefer told a staff meeting at the company’s Wolfsburg headquarters.

“We have absolutely no time to lose and will therefore significantly step up our performance programme once again,” he said, adding that the company and employee representatives will discuss how to proceed.

Europe’s biggest carmaker has made up its mind to cut a further 50,000 jobs (on top of the previously agreed 50,000) as part of a massive restructuring agreed with stakeholders a couple of weeks back, averting a full-blown dispute with powerful unions that still repeated calls on management to fix the issues.

Volkswagen works council chief Daniela Cavallo and IG Metall union head Christiane Benner, however, have called for stronger protection against “unfair competition” from China, along with measures like effective European Union (EU) subsidy policy and ‌continuation of ⁠a phased vehicle retirement programme.

“We expect corporate leaders and management teams to take responsibility for Germany as an automotive nation, for employees and for jobs,” Benner told workers at Volkswagen’s headquarters.

Volkswagen has already cut its 2026 profit margin outlook ⁠to 1% at the most, blaming the sluggish Chinese market and higher provisions for retirements while also lowering expectations for its Porsche sports car brand.

The revamp, in all probability, also eyes the end of Volkswagen’s struggling Spanish marque Seat, potentially making it the first major auto-brand casualty of the rise of Chinese carmakers as experts predict sweeping industry consolidation.

Seat would be the first longstanding auto brand to disappear since the early 2010s, when Ford axed Mercury, ‌General Motors dropped Saturn and Pontiac, and Saab went bankrupt.

Volkswagen said Seat’s future “beyond the current product cycle is still being evaluated”, adding that “various scenarios remain possible beyond 2030”.

As per Reuters’ report, Seat’s fast-growing sister brand Cupra, which is going electric, will get all future products as Seat’s combustion-engine ⁠models are phased out.

We would prefer to maintain one brand name, said the unnamed source who spoke with the outlet.

Established in 1950 as a state company, Seat was bought by Volkswagen in 1986 as a low-cost brand for its growing automotive empire.

However, the subsidiary didn’t launch a new model since 2020. In 2025, the Barcelona-based brand accounted for less than 3% of Volkswagen’s global deliveries in 2025.

Sister sports brand Cupra, launched in 2018, overtook Seat in annual sales for the first time in 2025.

Cupra offers three fully electric models, including the new Raval, which Seat-Cupra CEO Markus Haupt described in May as a “game changer.”

Seat, by contrast, has no fully electric models.

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The European giant, while embarking ⁠on its biggest ever restructuring, citing stiff Chinese competition, US tariffs, and overcapacity, is also exploring alternatives for four German plants that will eventually run out of models during the next decade, along with a reduction of around 50,000 more positions than previously planned.

As per reports from the German magazine Der Spiegel and Reuters, phasing out production in ⁠Emden and Zwickau would cost about 1 billion euros each, while 2 billion euros each would be incurred at the Neckarsulm and ⁠Hanover plants.

About 10 billion euro would be set aside for costs related to cutting up to ⁠60,000 jobs worldwide.

However, on September 7, the automobile giant found a ray of hope, as it signed a preliminary deal with Israel’s Aurelius Capital and Volkswagen’s ⁠home state of Lower Saxony, in which the carmaker would sell its factory in Osnabrueck that will then be repurposed for defence production under the new ownership.

According to the state’s labour officials, the move could preserve about 1,400 of the Osnabrueck site’s 1,800 jobs. The vehicle production there is due to end in 2027.

According to Volkswagen, an initial “anchor project” for Osnabrueck would be a cooperation with Israel’s Rafael Advanced Defense Systems, one of the key partners behind Israel’s Iron Dome, Arrow, ‌and David’s ⁠Sling air and missile defence systems.

“These plans involve the potential manufacture of systems and components for air defence systems for Germany and Europe,” Volkswagen said, adding that the newfound cooperation could pave the way for further such deals.

According to reports, Volkswagen is also considering converting its Amarok pickup trucks into military vehicles in response to the increasing pace of defence spending in Europe.

When it comes to repurposing underused automotive plants for defence production, Volkswagen is not alone, as Rheinmetall and Continental are also pursuing similar initiatives.

Under the new arrangement, Aurelius would take a majority stake ⁠in the Osnabrueck site alongside Lower Saxony, whose premier Olaf Lies said the state’s engagement would be similar to its stake purchase in the Meyer Werft shipyard in 2024.

At the time, Lower Saxony spent 200 million euros (USD 232 million) for a 40% stake in the shipyard.

In its pursuits of becoming leaner, Volkswagen is also considering the ‌sale of Ducati, the motorcycle maker owned by the Audi division.

Giving further hints about the news, Audi CEO Gernot Dollner told Bloomberg, “Within the Volkswagen Group, we are committed to disciplined, ⁠responsible portfolio management.”

“It’s part of the evaluation ⁠process that we’ll also talk about Ducati, but ⁠nothing has been decided,” he ⁠added further.

While Volkswagen is facing intense competition in China and looking to desparately scale up its 3% market share in the United States, it is also exploring a strategic partnership with Indian conglomerate JSW Group to improve competitiveness and profitability in the world’s third-largest ‌car market.

“The partnership is aimed at expanding Volkswagen’s portfolio in India, deepening local sourcing and strengthening manufacturing,” the German giant said.

JSW Group, a steel-to-energy Indian conglomerate, entered the South Asian giant’s passenger vehicle market in 2023 through JSW MG Motor India, a joint venture with China’s SAIC Motor that sells MG-branded cars.

“The proposed collaboration will likely be structured as a two-party partnership with joint control, defined operational roles, and governance mechanisms designed to enable quicker decision-making,” Volkswagen stated further.

The duo will also explore ‌ways ⁠to increase local sourcing, share vehicle platforms, and expand production capacity.

Volkswagen, whose market share in India stands around 2%, mainly sells vehicles through Skoda Auto in the South Asian nation.

Image Credit: Volkswagen Group

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