Volkswagen Group will continue with its restructuring programme even as its order backlog grows, chief executive Oliver Blume told German newspaper Bild am Sonntag.
Blume said the company is setting “clear manufacturing cost targets” across its production network to avoid expensive excess capacity, applying the same approach to plants in Germany, elsewhere in Europe and in China.
“We will continue to scrutinise capacities in the future,” Blume said.
“The restructuring will continue,” he added, reiterating Volkswagen’s plan to cut around 50,000 jobs in Germany by 2030.
He pointed to a comparatively high cost base in the group’s domestic market, including labour expenses, and said this would need to be addressed through higher productivity.
Blume also cited elevated energy costs and what he described as excessive regulation.
Blume said the long-standing model of developing and building vehicles in Germany and then exporting them was no longer viable because global regions had changed.
Volkswagen has guided for an operating return this year that could be as low as 4%, citing the impact of tariffs, investment in electric vehicles and stronger competition from China.
In the interview, Blume said Germany could take lessons from China’s approach to industrial policy. “The Chinese take a very systematic approach with so-called five-year plans and have clear priorities with that too,” he said. “It’s optimally structured. And what we find very positive in China is a high level of discipline and willingness to implement these initiatives.”
He also highlighted the intensity of competition in China, saying Volkswagen faces “over 150 competitors and strong innovation dynamics”.
“Volkswagen to press ahead with restructuring, CEO says” was originally created and published by Just Auto, a GlobalData owned brand.
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