50% cars to be discontinued, 50,000 jobs at risk! Amid global energy crisis international auto major sets for major move; Not Toyota, Honda, Kia, company is…

Volkswagen Group is preparing for one of the biggest transformations in its history. Instead of offering a car in every segment with multiple variants, the German auto giant has decided to focus on fewer models and its best selling products. By 2030, the company plans to cut its global model portfolio by around 50 percent and reduce product complexity by nearly 75 percent. The strategy is aimed at lowering costs, speeding up production and making the business more competitive as the global auto industry undergoes rapid change.

What is company planning?

Volkswagen says it will no longer maintain a large portfolio across every segment. The company wants to concentrate on vehicles that have the strongest demand and deliver better profits. While it has not revealed which models will be discontinued, the move is expected to affect brands across the group, including Volkswagen, Skoda, SEAT, Porsche, Bentley and Lamborghini.

Fewer variants and features

Apart from discontinuing models, company also plans to sharply reduce the number of trim levels, feature combinations and optional equipment. Volkswagen aims to cut overall product complexity by about 75 percent. It believes that simpler lineup will make manufacturing more efficient, reduce production costs and help the company bring new vehicles to market more quickly. Another key part of the strategy is greater technology sharing across the Volkswagen Group. The company plans to use fewer vehicle platforms and electronic systems so that multiple brands can share the same architecture and software. This is expected to improve efficiency and reduce development costs without compromising performance.

How is global auto sector performing?

Volkswagen remains the world’s second largest automaker after Toyota. Last year, Toyota produced about 11.3 million vehicles, while Volkswagen manufactured nearly 9 million units. Before the Covid 19 pandemic, Volkswagen had the capacity to produce around 12 million vehicles annually. That capacity has already been reduced, and the company is now planning further cuts in key markets such as Europe and China.

Falling business is major concern

Volkswagen says the global auto industry has become more challenging because of intense competition from Chinese manufacturers, stricter regulations, rising research and development costs and changing customer preferences. The company’s profits have also fallen significantly from 2021 levels, making cost reduction a top priority. According to Reuters, CEO Oliver Blume told employees that the company may need to cut around 50,000 more jobs to remain competitive. If implemented, the restructuring could affect nearly 100,000 employees across the Volkswagen Group, although the company has not officially confirmed factory closures or job cut plans.