Volkswagen to slash car models and production capacity amid financial pressures

Volkswagen, Europe's largest automaker, is planning a significant reduction in its vehicle models and production capacity over the coming years to lower costs. The company's management has presented these plans to the supervisory board, aiming for a gradual implementation. Volkswagen has been facing challenges including high expenses, overcapacity, intensified competition from China, stricter regulations, and potential U.S. import tariffs, all contributing to a weakened financial standing. The automaker's profit margin has reportedly been halved between 2021 and 2025. This streamlining initiative is expected to affect all brands within the Volkswagen Group, including Audi, Skoda, Seat, and Porsche, with each brand's portfolio being reduced by half. The production capacity is targeted to decrease from its current approximate 10 million vehicles annually to around 9 million per year. While the plans do not explicitly mention forced layoffs, reports suggest the potential closure of four German factories in Hannover, Emden, Zwickau, and the Audi plant in Neckarsulm, which could impact 100,000 jobs. These reports have triggered protests at various company sites, with around 400 employees demonstrating at the Wolfsburg headquarters. The IG Metall trade union has vowed strong opposition to any large-scale job losses.