Volkswagen CEO: "Considering Further 1 Million Unit Production Cut to Reflect Market Conditions"

Volkswagen Group, the largest automobile manufacturer in Europe, announced on April 21 (local time) that it plans to reduce its annual production capacity to around 9 million vehicles.

Oliver Blume, CEO of Volkswagen Group, stated in an interview with the business media outlet Manager Magazin on the same day, "It is difficult to maintain excess production capacity in the long term," adding, "We are considering options to reduce production capacity by up to an additional 1 million vehicles, reflecting the global market situation."

Volkswagen logo. The Asia Business Daily DB

Volkswagen Group’s global production capacity—including all its brands such as Volkswagen, Audi, and Porsche—was about 12 million vehicles in 2019. However, during the COVID-19 pandemic, capacity was reduced by approximately 1 million vehicles each in China and Europe.

If the plan proceeds as intended, the production capacity will decrease by about 25% from the 2019 peak. Volkswagen Group's global vehicle deliveries reached 10.97 million units in 2019 but dropped to 8.98 million last year. CEO Blume said, "After the pandemic, 9 million has become the average in a completely changed market."

He also mentioned, "There are wiser ways than shutting down factories," and that no decision has been made yet on whether more plants will be closed to reduce production capacity. Additionally, he said, "We are reviewing all cost items," leaving open the possibility of further layoffs. Volkswagen has already begun restructuring, having halted production at 2 out of its 10 plants in Germany and initiating plans to cut up to 50,000 jobs by 2030.

This content was produced with the assistance of AI translation services.