Volkswagen AC is eyeing what experts expect to be a far-reaching overhaul and, toward that end, the automaker said Thursday it would “drastically pare back” both its model lineup and production capacity.0
Europe’s top carmaker said the model lineup would be gradually cut by up to half and concentrated on the most attractive market segments, adding that production capacity would be reduced further to 9 million vehicles per year, according to a report from Reuters.
Sources told the outlet that CEO Oliver Blume plans to cut up to 100,000 jobs and close four German factories, which drew massive worker protests across Volkswagen’s German sites.
Factors affecting this decision include high costs and excess capacity at home, rising Chinese competition and U.S. import tariffs, which has Volkswagen under pressure to restructure the business model that underpinned its success for decades.
The prospect of plant closures and deep job cuts at one of Germany’s most storied companies, founded 89 years ago, also underscores the challenges for Europe’s largest economy as it struggles with weak growth and high labor and energy costs, according to the Reuters report.
