“Volkswagen is no longer competitive”

These cruel but fairly clear words about Volkswagen’s situation were spoken by the company’s VP, Thomas Schaefer.

The Volkswagen group announced this week a massive cost-cutting plan of 10 billion euros. This plan comes with its unfortunate share of job cuts, but it is considered crucial by the brand’s leaders.

“With our unsuitable structures, processes, and high costs, Volkswagen is no longer competitive as a brand”, declared Thomas Schaefer, CEO of Volkswagen Passenger Cars, in front of the company’s executives gathered in Wolfsburg.

The efforts to reduce staff will mainly take the form of partial or early retirement offers. Most of the savings are expected to come from cost-reduction measures independent of personnel. The least Volkswagen could do since the manufacturer recently positioned itself as a major defender of work and promised not to undermine its workforce before 2029! Missed that…

Despite an increase in deliveries of electric vehicles this year, Volkswagen’s sales still lag behind those of market leaders Tesla and MG. Worse, Volkswagen has been overtaken by manufacturers such as Volvo, Renault, and Peugeot in the urban family car segment, traditionally VW’s favorite playground. However, Volkswagen quickly chose to develop 100% electric platforms for the ID.3, ID.4, ID.5 or ID.Buzz, while others simply electrified their thermal models.

Volkswagen’s strength could allow it to overcome these hurdles, but rapid action is necessary. The group’s CEO, Oliver Blume, announced earlier this month that he believes the brand’s electric vehicle priced at 20,000 euros will arrive in the second half of this decade. That is much later than Stellantis with the Citroën e-C3 or Renault with the Twingo, and one can only wonder about the Asian surge… Good news for French manufacturers who are already ready!

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