Volkswagen CEO looks to avoid plant closures as car maker moves to cut costs

Sunday, 12 July 2026

Employees of car maker Volkswagen rally on the grounds of the VW headquarters in Wolfsburg, Germany on Thursday.

Volkswagen's CEO indicated in comments published that he's trying to avoid closing plants as he seeks to turn around the car maker's performance.

The Wolfsburg, Germany-based company faces pressure to cut costs at home and increasingly intense competition in the lucrative Chinese market, in particular.

Last week, Volkswagen said its “fundamental realignment” over the past three years had reached its next phase, announcing plans to streamline the model lineup by up to half.

It didn't provide specifics, and questions remain over how else it will cut costs. There has been renewed speculation about the future of several plants in Germany.

“There are more intelligent solutions than closing plants,” CEO Oliver Blume told the Bild am Sonntag newspaper.

He added that a cost-cutting programme in Germany already is producing effects. “We were able to improve our factory costs in Germany by an average 20% last year alone,” he said, describing that as “strong progress.”

Blume argued that Volkswagen's products are very popular, but “we just earn too little money with them. So we must continue to reduce our costs. In all kinds of costs.”