Volkswagen CEO Admits European Overcapacity, Denies Talks with Chinese Automakers

Volkswagen CEO Oliver Blume stated at an employee assembly in Wolfsburg, Germany, that the company currently faces significant overcapacity in Europe and Germany, describing it as a pressing reality that must be addressed. He emphasized that Volkswagen must tackle this challenge to remain competitive. Blume also denied that the company is engaged in any negotiations or developing cooperation plans with Chinese automakers regarding this issue. Over the past three years, Volkswagen has continuously implemented cost-cutting measures, reducing its workforce in Germany by 50,000 employees, while its Audi and Porsche brands have also undergone staff reductions. Blume noted that these actions have enhanced the company's resilience amid high tariffs and shifting global market conditions. However, Volkswagen’s sales in the European market have struggled to return to pre-pandemic levels. In recent years, Volkswagen’s long-standing "Made in Germany, exported globally" model has gradually shifted toward localized production in key markets, particularly in China, where it primarily operates through joint ventures with local Chinese companies. Previously, Volkswagen pledged to German labor unions and works councils that it would strive to avoid plant closures wherever possible.