According to a Reuters report on April 30th, the Volkswagen Group is expected to bring production of its China-exclusive models back to Europe for local sales. Volkswagen Group CEO Jürgen Obomü stated on Thursday that the group may also share European factory capacity with its Chinese partners. This comes just before Volkswagen’s quarterly profits declined again, further highlighting the need for deep restructuring at the German automaker.
Obomour stated that Volkswagen’s first-quarter performance was still solid despite tariff pressures and weak demand. “However, we must also be clear that in a changed environment, our current business model is not generating sufficient returns.”
Volkswagen’s management has previously stated that existing cost-cutting measures alone cannot guarantee the group’s future development. According to the plan, Volkswagen will cut 50,000 jobs across the German group by 2030.
Currently, the Volkswagen Group sells approximately 150 models, covering premium brands such as Porsche and Audi. In the first three months of this year, the group’s operating profit fell 14% year-on-year to €2.5 billion (approximately RMB 20.022 billion at the current exchange rate). A Visible Alpha survey indicates that analysts had previously expected Volkswagen’s operating profit to remain roughly flat.
Obomü stated that for underutilized factories like those in Osnabrück, northern Germany, cooperation with the expanding defense industry is a priority. However, cooperation from China could also be a solution.
Over the past few years, Volkswagen has invested billions of euros in research and development and production in China, and has significantly updated its product lineup through local partners to adapt to the world’s largest and fastest-growing automotive market.
According to Obermann, Volkswagen now wants to assess which Chinese models are suitable for the European market. The company will also explore the possibility of sharing European factory capacity with Chinese partners, but it did not disclose further details.
This marks the first time Volkswagen has confirmed it is considering this path. For the struggling German auto industry, this approach could help boost employment and productivity.
Chinese automakers currently hold a relatively small market share in Europe, particularly in Germany, but are gradually increasing their presence. The Middle East conflict has driven up fuel prices, making Chinese automakers’ products, primarily pure electric vehicles, more attractive.
