Volkswagen is considering closing four plants and implementing sweeping cost-cutting measures in what is being described as the biggest overhaul in the company's history.
The details: Members of the German automaker's supervisory board have been briefed on the proposals, which are expected to be discussed at a July 9 meeting, according to Reuters.
The reported closures include plants in Hanover, Zwickau and Emden, along with Audi's Neckarsulm facility, potentially eliminating 45,000 jobs, according to sources familiar with the matter.
Combined with roughly 50,000 previously announced job cuts, the total workforce reduction could approach 100,000 positions.
Volkswagen is also expected to reduce planned investments by about 15% to just over €130 billion ($148 billion) over the next five years.
The automaker is also reportedly considering spinning off its core Volkswagen brand and parts operations into separate entities.
Why it matters: The proposed restructuring underscores the mounting pressure facing global automakers as weak demand, rising costs and intensifying competition force companies to rethink their operations.
What they’re saying: "The entire group, including its brands and subsidiaries, must undergo far-reaching change," a Volkswagen spokesperson told Reuters, though VW's works council and Germany's IG Metall union have said they will fight the measures.
OUTSMART THE CAR MARKET IN 5 MINUTES A WEEK
Get insights trusted by 55,000+ car dealers. Free, fast, and built for automotive leaders.
Between the lines: Volkswagen's operational challenges have intensified alongside shifting market dynamics, making restructuring essential for its long-term strategy amid declining sales, according to reports.
Volkswagen's U.S. deliveries fell 13% in 2025 from the prior year, with the decline accelerating to 19.8% in the fourth quarter.
U.S. passenger car sales dropped 26% in 2025, while SUV sales declined 8.9%.
Volkswagen Group's Audi brand posted a 16% decline in U.S. sales in 2026, while Porsche set a U.S. sales record in 2025 with 76,219 deliveries, narrowly surpassing its 2024 high.
“We must fundamentally transform our business model and achieve structural, sustainable improvements,” said Volkswagen Chief Financial Officer Arno Antlitz, per CNBC, as previously reported by CDG News. “This includes improving the cost structure of our vehicles without compromising product substance, significantly reducing overhead costs, increasing the efficiency of our plants, and accelerating technology development and decision-making.”
Bottom line: Volkswagen's proposed restructuring highlights the continued cost-cutting measures and production shifts that could have downstream effects on inventory, product mix, and long-term brand strategy for dealers.
A quick word from our partner
Running a dealership is hard.
Between vendor strategy, process management, market timing, and hiring, one wrong decision can cost hundreds of thousands.
That’s why we created CDG Circles.
It’s not a 20 Group. Circles connects you with top operators across brands through confidential text-based chats — giving you daily intel, real-world feedback, and instant answers from people who actually live it. Ask questions 24/7 and get real-time responses from experienced dealers in curated peer groups built specifically for your level and store type.
No vendors. No sales pitches.
No travel.
Just real operators helping each other win.
