Volkswagen approves the restructuring plan, which includes job cuts and the closure of SEAT by 2029

In order to neutralise the co-management system that gives the state a veto over strategic decisions (thanks to a 20 per cent stake), the Board of Directors is said to have threatened to spin off the main Volkswagen brand. The Government of Lower Saxony opposed such a drastic move.

The group announced in a press release that it will streamline its shareholdings and reduce its model range by around 50 per cent . Volkswagen intends to cut production capacity by around 500,000 vehicles in Europe to avert losses of €1.5 billion a year, according to its chief financial officer, Arno Antlitz. The decision gives Blume a stronger mandate to press ahead with his ‘Plan for the Future’.

In a statement, IG Metall and the group’s works council emphasised that this had prevented the situation from escalating – namely, the spin-off of the Volkswagen brand and the components division – and that the attack on co-determination had been repelled. IG Metall stresses that no plant closures have been confirmed at this stage. Volkswagen has confirmed that alternative uses will be sought.

A spokesperson also stated that, under the current agreements, compulsory redundancies remain ruled out until the end of 2030, and the company will proceed with voluntary and incentivised departures.

The Governor of Lower Saxony, Olaf Lies (SPD), said that “this decision sends out important signals: we are investing heavily in future sustainability and improving our competitiveness”.

The reorganisation plan aims to achieve an operating margin of 9 per cent by 2030, up from the current figure of less than 4 per cent, with annual sales of around 9 million vehicles. VW also plans to invest 135 billion euros in capital expenditure and research and development between 2027 and 2031, according to the company.

But this is not the only news of the day, as according to the magazine “Wirtschaftswoche”, the board of directors of the Wolfsburg-based car manufacturer – in the midst of the biggest restructuring in its history – intends to withdraw from the market the long-established Spanish brand Seat (founded in the 1950s by the Spanish government and Fiat, then acquired by VW in the 1980s), with its closure scheduled for 2029 at the latest.

By excluding Seat from the strategic vision drawn up for 2030, VW aims to cut costs, streamline processes and thus focus more on the brand Cupra, which has long since overtakenSeat in terms of sales. According to data from Bild, 170,100 Cupra cars were delivered in the first half of 2026, compared with 129,600 for Seat.

A Volkswagen spokesperson, when questioned by the German newspaper, played down the reports, stating that the company does not comment on internal documents: “Internal documents are discussed and approved by the relevant bodies. We do not pre-empt this process.” However, the possible closure of SEAT is only one part of the major reorganisation currently being planned at VW.