The VW Group Is Gutting Its Lineup. Up To Half Its Models Could Die

We knew things were bad at the Volkswagen Group for a while, but the severity of the situation is downright shocking. In a worrying press release issued just minutes ago, the German automotive conglomerate revealed a sweeping plan to drastically downsize, not in a few years, but “with immediate effect.” It intends to reduce its model lineup across its brands by up to 50 percent. Yes, the portfolio could be cut in half, leaving only the models competing in the “most attractive market segments.”

That’s not all. The number of available options for the surviving models will be cut by up to 75 percent. The VW Group has done an excellent job of allowing customers to configure their cars down to the tiniest details, not just on its luxury models but on its mainstream cars as well. Sadly, those days appear to be ending as the cost-cutting agenda calls for a dramatically simplified list of options.

In the future, the juggernaut wants to prioritize “products and technologies that deliver the greatest added value for customers and the highest value contribution to the Group.” In other words, it will focus on the most popular models and those that generate the highest profit margins. The “with immediate effect” part of the statement we mentioned earlier implies the company has already decided which models and options will stay and which will go.

Photo by: Volkswagen

Several Models Have Already Been Discontinued

For the time being, we only know that the Touareg and Touran minivan are already gone, with the T-Roc Convertible to follow them into the car graveyard in 2027. Elsewhere, Audi recently bid adieu to the A1 supermini and the Q2 subcompact crossover, following the discontinuation of the TT, R8, and Q8 E-Tron in the last few years. Porsche retired the 718 Boxster and Cayman last October and will end production of the original Macan late this month.

The VW Group is also reducing its annual production capacity to just nine million units. It’s a far cry from the pre-coronavirus era, when the company invested to boost its total capacity to around 12 million vehicles. Since the COVID-19 pandemic, it has already cut capacity by two million units and is now looking to eliminate another million.

Despite the further reduction in annual production capacity, the company isn’t commenting on reports of the potential closure of four plants. At the end of June, German business publication Manager Magazin wrote that the VW Group could shut down the Zwickau, Emden, Hanover, and Neckarsulm sites. Moreover, the report alleged the company is looking to double the number of layoffs to 100,000. However, the VW Group isn’t saying a word about any plant closures or additional layoffs beyond the already announced 50,000 job cuts.

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Source: Volkswagen

Motor1’s Take: Even with all the reports raising red flags about the VW Group’s dire situation, today’s announcement is a lot to take in. Gutting the lineup to this extent is practically unheard of in the automotive industry. Then again, the product portfolio is enormous, spanning a plethora of models across the Volkswagen core brand, Audi, SEAT, Cupra, Skoda, Porsche, Bentley, and Lamborghini. Bugatti is no longer part of the picture after Porsche sold its stake in Bugatti Rimac.

Insiders claim advisors are recommending that Ducati should be put up for sale, while Lamborghini should become publicly traded, but the VW Group remains tight-lipped. However, a recent company statement stopped short of explicitly ruling out either move, and in light of today’s announcement, it seems that almost anything is possible.