- The VW Group wants to cut costs by 20 percent by the end of 2028.
- Plant closures may be part of the plan.
- The savings will be applied across all brands.
Here we go again. The Volkswagen Group may have already implemented a cost-cutting strategy, but apparently it’s not enough. Despite saving an unspecified amount in the double-digit billion-euro range, it now needs to cut further, according to a company spokesman. A new report from Germany claims the automotive giant is trying to cut costs by a fifth.
Business publication Manager Magazine (subscription required) VW Group’s top executives are alleged to have attended a meeting in Berlin last month, during which CEO Oliver Blume and CFO Arno Entlitz outlined a “massive” cost-cutting agenda. The plan reportedly calls for all brands to cut costs by 20 percent by the end of 2028. Spiegel It added that the company aims to save around €60 billion.
It is not clear how the VW Group intends to save such a significant amount of money in a relatively short period of time. however, Manager Magazine suggests that the worst-case scenario is possible: plant shutdown. The report alleges that Wolfsburg bosses are not ruling out closing additional factories after ending car production at the Dresden site last December. The “Transparent Factory”, where the Phaeton once rolled off the assembly line, became the company’s first German plant to close in 88 years after production of the ID.3 ended.
Photo by: Volkswagen
As for why VW Group needs to cut costs further, several factors are at work. Sales in China continue to decline, falling eight percent to 2.69 million vehicles last year. While the year-over-year decline may not seem dramatic, a broader look at previous results tells a different story. In 2019, VW Group deliveries in China reached 4.23 million units, meaning annual demand has declined by 1.5 million vehicles, or about 36 percent, in just six years.
And it’s not just China. Tariffs in the United States are also weighing on VW Group’s bottom line, along with fierce competition in the global automotive sector. According to Manager Magazineall three factors are pushing for deep cost cuts, although nothing has been officially confirmed.
We should know more on March 10, when Oliver Blume is expected to provide additional details during VW Group’s annual results presentation. In 2025, global sales fell 0.5 percent to 8,983,900 units, making Toyota the world’s best-selling automaker for the sixth year in a row. The Japanese conglomerate delivered 11,322,575 vehicles in 2025, including vehicles from its Lexus, Daihatsu and Hino subsidiaries.
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Source: Volkswagen
Motor1’s Tech: The situation at VW Group is not exactly rosy, especially considering that the company has already decided to cut 35,000 jobs in Germany by the end of the decade. The reported 20 percent cost reduction will come on top of the €15 billion the company expects to save annually in the medium term through workforce reductions and the elimination of in-house production shifts.
That said, VW Group has reasons for cautious optimism. It is preparing to launch a new wave of more affordable electric vehicles starting at €25,000 ID. The Polo is arriving this year, complete with a crossover counterpart. In 2027, an entry-level €20,000 EV will indirectly e-up! will replace, which was discontinued a few years ago. Sister brands such as Audi, Skoda, and Cupra are also set to introduce more affordable electric models to expand their growing EV portfolios.
Sources:
Manager Magazine, Spiegel
