German automotive giant Volkswagen is accelerating one of the biggest transformations in its history. Under pressure from electrification, increasingly fierce Chinese competition, and high production costs, the group aims to streamline operations, reduce the number of models, and save over six billion euros annually by the end of the decade.
The group's management presented a new transformation plan at the shareholders' meeting, based on eight key measures.
The first of these involves reducing the number of models and vehicle variants. According to management, the offering has become too fragmented, and many models are not achieving sales results that justify development and production costs.
Although Volkswagen has not yet officially published the full list of models it plans to discontinue, some decisions have already been made. After more than two decades of production, the Touran, one of Europe's most recognizable family MPVs, is being phased out. In 2027, production will also end for the T-Roc Cabriolet, one of the few convertibles among SUVs on the global market. Meanwhile, Audi has already discontinued the entry-level models A1 and Q2.
The first concrete signs of change are already visible. Volkswagen has discontinued the Touran model, and in 2027, the T-Roc Cabriolet will also disappear from the lineup. At Audi, the A1 and Q2 models have already been discontinued, reports focus.de.
In the coming years, models with smaller market shares will gradually disappear, while the most resources will be allocated to the best-selling cars.
Toyota has undergone a similar process in recent years.
The transformation is not limited to cars. Volkswagen also wants to reduce the number of platforms on which it develops its vehicles. This should lower development costs, simplify production, and accelerate the introduction of new models to the market.
At the same time, the company plans to reduce excess production capacity in factories where demand for products no longer reaches previous levels.
Behind the scenes, extensive job cuts are also underway. According to the group's plans, up to 50,000 jobs could be eliminated at Volkswagen, Audi, Porsche, and the software company Cariad by 2030. Agreements for more than 28,000 employees are said to have already been signed.
Savings, but also the largest "product offensive" to date
An interesting aspect of Volkswagen's strategy is that while reducing the number of models, it is simultaneously preparing one of the largest product offensives in its history.
Last year, the group introduced more than 30 new models, and this year it plans to add about 20 more.
Among the most important new models are the electric ID. Polo, Cupra Raval, Škoda Epiq, and Audi A6 Allroad. Audi is also preparing a return of the A2 model, which is expected to become the brand's new electric entry-level vehicle.
Škoda will soon also present its large seven-seat electric SUV, the Peaq.
Behind all these changes lies a broader problem for the European automotive industry. Chinese electric vehicle manufacturers are becoming increasingly strong, while European manufacturers face high labor costs, expensive energy, and demanding environmental regulations.
Volkswagen is therefore trying to become faster, cheaper, and more flexible. "The situation remains challenging," admitted the group's CEO, Oliver Blume.
However, management believes that simplifying the offering, reducing costs, and focusing on the best-selling models will enable Volkswagen to remain one of the world's largest car manufacturers even during the electric revolution.
