Volkswagen Group’s sweeping cost-cutting effort is facing resistance from the company’s own supervisory board deputy chair, who has criticized its 2030 profitability target as unrealistic amid tougher business and geopolitical conditions.
Volkswagen Targets Major Cost Cuts
Volkswagen Group has been considering major measures to address its profitability problems, including the possible closure of four German manufacturing plants, cuts of up to 100,000 jobs and a reduction in the model lineup across brands including Audi and Porsche.
The company is seeking an operating return on sales of 8% to 10% by 2030. But Christiane Benner, Volkswagen’s supervisory board deputy chair, described the target as belonging in “cloud-cuckoo-land,” according to Bloomberg.
Volkswagen reported an operating return on sales of 4.2% in the second quarter.
VW Faces Tougher Business Conditions
Benner, who also chairs Germany’s IG Metall labor union, said CEO Oliver Blume’s profitability targets are unrealistic given current geopolitical and business conditions.
In the U.S., Volkswagen is dealing with import tariffs imposed by the Trump administration, while weaker EV demand likely contributed to the ID. Buzz skipping the 2026 model year. The company is also facing stronger competition in China, where newer and more affordable domestic EVs have flooded the market.
Blume has said Volkswagen’s overhead costs are more than 30% higher than those of comparable companies. He wants to reduce annual production capacity in Europe by another 500,000 units, a move that could affect factories and jobs.
Volkswagen has not released a complete list of models that could be eliminated. However, models that have failed to meet market expectations could be among those affected, including the Taigo, ID.4 and ID.5.
Benner said Volkswagen’s executive board must provide clearer, revised cost-cutting plans before the supervisory board will approve them.
Volkswagen Considers U.S. Pickup Strategy
As Volkswagen looks for ways to improve its position in the U.S., the company is considering entering the pickup-truck segment.
The U.S. market is described as lucrative, with Ford F-150s and Chevrolet Silverados abundant on the road. Reports suggest Volkswagen could instead target the midsize segment, where models such as the Ford Ranger compete.
No final decision has been made. A pickup could provide Volkswagen with another potential route to U.S. growth after its EV lineup struggled to gain traction.
Labor Opposes Factory Closures
As Volkswagen works toward its 2030 profitability targets, Benner wants the automaker to identify which models would be affected, explain how it plans to achieve its goals and consider alternative ways to reduce costs.
She also said labor will not accept factory closures, adding another obstacle to Volkswagen’s cost-cutting plans.
