Volkswagen plans to drastically cut its model lineup and further pare back capacity, as Europe's largest automaker considers a far-reaching overhaul that sources say could cost around 100,000 jobs.
Volkswagen is under unprecedented pressure to restructure the business model that underpinned its success for decades, as it grapples with high costs and excess capacity at home.
Those factors, along with rising Chinese competition, regulation, and U.S. import tariffs, have sliced its profit margins in half between 2021 and 2025.
The company said on Thursday, following a supervisory board meeting, that its lineup would be gradually cut by up to half, as it concentrates on the most attractive market segments. Production capacity will be reduced to nine million vehicles per year, down from 10 million currently.
"The global situation has continued to deteriorate over the past twelve months," Volkswagen CEO Oliver Blume said. "That is why we are acting now."
