There could be more pain ahead for the Volkswagen Group, with executives from the German auto giant reportedly flagging big cuts heading down the turnpike.
According to Manager Magazin (via Der Spiegel and Reuters), in the middle of January Oliver Blume, CEO of the Volkswagen Group, and Arno Antlitz, the group’s chief financial officer, held a meeting with 120 senior managers covering all of the company’s brands and divisions, warning them to prepare for a large cost-cutting program.
The German business publication believes the automaker’s “ambition” is to cut costs by €60 billion (A$100bn) or 20 per cent by the end of 2028. Attendees weren’t told where savings were to be found, but the company reportedly hasn’t ruled plant closures.
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Mr Blume is expected to publicly announce details about the latest cost-cutting drive on March 10 at the company’s annual results press conference.
As part of an earlier round of cost-cutting at the end of 2024, the automaker and its unions agreed to let go of up to 35,000 people by 2030. Volkswagen also managed, for the first time, to close a plant on home soil, the transparent factory in Dresden, which was opened at the beginning of the century to produce the Phaeton luxury sedan.
A company spokesperson told Reuters the program has yielded savings in the double-digit billion euro range, and helped the automaker withstand geopolitical headwinds, including tariff uncertainty in the US.
It’s understood this latest upcoming set of drastic cuts are necessary due to the company’s weakening position in China, fluctuating US tariff policies, and intense competition. The company is also spending big on software development, electric drivetrains, and upgraded combustion engines.
Although the Volkswagen Group’s global sales largely held firm in 2025 at 8.96 million, and the company finished second in the global sales charts behind a growing Toyota, things in China aren’t quite as rosy.
Both the Volkswagen and Audi brands jumped into the Chinese market when it was opened up to foreign automakers in the 1980s, and the German automaker was number one there from 1986 until it was overtaken by BYD in 2023.
Sales in China peaked in 2019 when the German automaker shifted 4.23 million vehicles. In 2025, the Volkswagen Group sold just 2.69 million cars in China, an 8.0 per cent drop on 2024, and 36.4 per cent or 1.54 million units down from the company’s high point.