Volkswagen considers new cuts to regain momentum

Volkswagen is aiming for further cost reductions to protect profitability that will remain under pressure due to competition, tariffs and the cost of developing electric vehicles. Europe's leading carmaker expects an operating margin of between 4 per cent and 5.5 per cent this year, putting it at the lower end of analysts' expectations. The company, which has already planned to cut about 50,000 jobs by the end of the decade, will focus on making more savings from its diverse operations.

"We have cut costs by 20 per cent at the three main plants in Germany, but we need to do more because costs in Europe are still too high and we also face competition from China," said CEO Oliver Blume during the call with analysts. 'We confirm the target of cutting 50,000 jobs by 2030, including 35,000 at Volkswagen. Production capacity, on the other hand, will be reduced by 700 thousand cars,' he added.

As for the facilities, Blume confirmed ongoing negotiations with defence groups for the Osnabruck site in Lower Saxony with the aim of 'reaching an agreement within the year', he concluded.

Volkswagen is countering rapid competition in China, still its largest market, and weak demand in Europe, where the transition to electric remains unstable. The conflict between the US, Israel and Iran is also increasing the risks of supply chain disruptions and delays in consumer spending.

The shares rose as much as 2.6 per cent in early trading in Frankfurt, despite 2025 losses of around 13 per cent. The company proposed to reduce the dividend by 17% to EUR 5.26 per share.