The automotive industry is rapidly evolving, with companies like Volkswagen Group striving to maintain their competitive edge on the global stage. CEO Oliver Blume remains committed to German production, despite the challenges posed by international competition, particularly from China and the United States.
In an interview with Bild am Sonntag, Blume emphasized that maintaining production in Germany is feasible if costs are reduced, productivity is enhanced, and the company adapts to the shifting global landscape. This comes amid plans to cut 50,000 jobs in Germany by 2030 as part of a broader restructuring effort.
The CEO acknowledged that exporting vehicles produced in Germany is becoming less viable due to changing global dynamics. “Developing and producing vehicles in Germany and then exporting them no longer works the way it used to because global regions have changed,” Blume noted, highlighting the need for localized production strategies.
Focus on China
Volkswagen has been adapting its strategy in China, a key market where the company once led in sales but has fallen behind competitors like BYD and Geely Auto. The company’s sales in China dropped by 8% in 2025, with battery-electric vehicles experiencing a significant decline.
To regain its footing, Volkswagen has forged partnerships with local companies, including SAIC and XPeng, to develop vehicles that cater to Chinese consumers. In July 2023, Volkswagen invested $700 million in XPeng to jointly create new electric vehicle models.
Strategic Partnerships
The collaboration with XPeng has expanded to include a joint electronic architecture and plans for new hybrid and combustion models. By 2030, Volkswagen aims to produce most of its Chinese vehicles on the China Electric Architecture (CEA) platform co-developed with XPeng.
Volkswagen’s strategic moves in China demonstrate its commitment to tailoring products for regional markets. In 2024, the company and its joint venture partners delivered 2.93 million vehicles in mainland China and Hong Kong, reflecting the importance of the Chinese market to Volkswagen’s global strategy.
Challenges and Job Cuts
In light of these challenges, Volkswagen announced significant job cuts, impacting 50,000 positions by 2030. These measures are part of efforts to achieve cost savings and navigate the evolving global automotive landscape.
Blume has faced questions about potential plant closures in Germany, following a McKinsey study suggesting drastic reductions. However, he downplayed the report’s significance, stating, “I am not aware of any such McKinsey study.” He emphasized the need for ongoing reviews to optimize capacity and reduce costs.
Global Outlook
Blume’s outlook for Volkswagen reflects a changing global market. He noted that “the world today is completely different from three years ago,” with Europe facing increased competition and aggressive trade policies in the US. Despite these challenges, Blume remains optimistic, highlighting savings and positive customer reception of Volkswagen’s products.
Original Story at eletric-vehicles.com