VW may close four factories to adapt to the future, report says

Volkswagen Group is reportedly contemplating the unprecedented decision to shut down up to four factories in Germany, a move that could result in a 15 percent reduction in its workforce. The year 2025 proved challenging for Europe's largest automaker, with sales stagnating while profits plummeted by 44 percent, dropping to €6.9 billion ($7.9 billion). The company's operating margins have also suffered, more than halving during this period. The financial downturn appears set to persist into 2026, prompting Volkswagen to announce plans to eliminate 50,000 jobs in Germany by 2030 as part of a broader strategy to adapt to the evolving automotive landscape. However, a recent report from Manager Magazin suggests that the potential job losses could be even more extensive than initially anticipated. While Volkswagen experienced success in selling electric vehicles across Europe last year, the company's sales in North America and China have been declining, compounded by the impact of tariffs. In April, Arno Arnitz, the CFO and COO of VW Group, expressed to investors that the company's current operating margin is “far too low.” He emphasized the necessity for a fundamental transformation of the business model to enhance cost-efficiency and maintain quality. This transformation would involve a significant reduction in complexity across their product offerings, technology platforms, and organizational structure, as Arnitz outlined.