- The VW Group is looking to slash costs by 20 percent by the end of 2028.
- Plant closures could be part of the plan.
- Savings would be implemented across all brands.
Here we go again. The Volkswagen Group may have already implemented a cost-cutting strategy, but it’s apparently not enough. Despite saving an unspecified amount in the double-digit billion-euro range, according to a company spokesperson, it now needs to trim even more. A new report from Germany claims the automotive conglomerate is looking to slash costs by a fifth.
Business publication Manager Magazin (subscription required) alleges top executives from the VW Group attended a meeting in Berlin last month, during which CEO Oliver Blume and CFO Arno Antlitz outlined a “massive” cost-cutting agenda. The plan reportedly calls for reducing expenditures by up to 20 percent across all brands by the end of 2028. Spiegel adds that the company is aiming to save approximately €60 billion.
It’s unclear how the VW Group intends to save such a significant sum in a relatively short timeframe. However, Manager Magazin suggests a worst-case scenario is possible: plant closures. The report alleges that higher-ups in Wolfsburg are not ruling out shutting down additional factories after ending car production at the Dresden site last December. The “Transparent Factory,” where the Phaeton once rolled off the assembly line, became the company’s first German plant to close in 88 years after ID.3 production ended.
Photo by: Volkswagen
As for why the VW Group needs to cut costs even further, several factors are at play. Sales in China continue to decline, falling eight percent last year to 2.69 million vehicles. While the year-over-year drop may not seem dramatic, a broader look at previous results tells a different story. In 2019, VW Group deliveries in China reached 4.23 million units, meaning annual demand has plunged by 1.5 million vehicles, or roughly 36 percent, in just six years.
And it’s not just China. Tariffs in the United States are also weighing on the VW Group’s bottom line, along with intensifying competition across the global automotive sector. According to Manager Magazin, these three factors are driving the push for deeper cost cuts, although nothing has been officially confirmed.
We should learn more on March 10, when Oliver Blume is expected to provide additional details during the VW Group’s annual results presentation. In 2025, global sales slipped 0.5 percent to 8,983,900 units, allowing Toyota to remain the world’s best-selling carmaker for the sixth consecutive year. The Japanese conglomerate delivered 11,322,575 vehicles in 2025, including those from its Lexus, Daihatsu, and Hino subsidiaries.
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Source: Volkswagen
Motor1’s Take: The situation at the VW Group isn’t exactly rosy, especially considering the company has already decided to cut 35,000 jobs in Germany by the end of the decade. The reported 20-percent cost reductions would come on top of the €15 billion the company expects to save annually in the medium term through workforce reductions and the elimination of certain production shifts at home.
That said, the VW Group has reasons for cautious optimism. It’s preparing to launch a new wave of more affordable electric vehicles, starting with the €25,000 ID. Polo arriving this year, complete with a crossover counterpart. In 2027, an entry-level €20,000 EV will indirectly replace the e-up!, which was discontinued a few years ago. Sister brands such as Audi, Skoda, and Cupra are also set to introduce more affordable electric models to expand their growing EV portfolios.
Sources:
Manager Magazin, Spiegel
