The Volkswagen Group’s cost-cutting program is in full swing. In 2025 alone, factory costs at its German plants were slashed by more than 20 percent. By the end of the decade, as many as 50,000 jobs will be eliminated across Volkswagen, Audi, Porsche, and software subsidiary CARIAD, with agreements for more than 28,000 employees already signed. But that’s still not enough to transform the automotive giant into a leaner, more efficient business.
At the annual general meeting held this week, the VW Group outlined the next stage of its transformation process. The plan consists of eight key initiatives, with the very first focused on reducing complexity across the portfolio. Much like Toyota’s effort to streamline its sprawling lineup, the German conglomerate wants to build fewer models and variants. The goal is to place greater emphasis on high-volume products by focusing on what sells best rather than maintaining a myriad of models with middling performance.
'Reduce complexity. Volkswagen wants to make navigating the range of models and variants easier and to focus even more closely on the expectations of customers in the regions. This should generate higher volumes per model.'
Fewer Platforms, Less Production Overcapacity
The second initiative is a direct consequence of the first. The VW Group also plans to reduce the number of platforms and electronic architectures. Doing so will lower costs, reduce complexity, and help accelerate vehicle development. The third step is closely related as well. The company aims to address overcapacity at factories where demand for the vehicles being produced no longer matches plant output.
The full list is available on the company’s website, and if everything unfolds according to plan, the VW Group expects to achieve annual net cost savings of more than €6 billion by 2030. In the meantime, CEO Oliver Blume acknowledges that “the situation remains challenging” but remains optimistic about what lies ahead.
Out With The Old, In With The New
While it’s still too early to say which models will survive and which are facing extinction, some casualties have already emerged. Audi recently pulled the plug on the A1 and Q2, while Volkswagen discontinued the aging Touran minivan. In 2027, the T-Roc Cabriolet will also disappear from the lineup.
However, that doesn’t mean the VW Group is slowing its product offensive. The company launched more than 30 new models last year and plans to introduce another 20 in 2026. We’ve already seen some of them this year, including the ID. Polo, Cupra Raval, Skoda Epiq, and Audi A6 Allroad. Later this year, the Audi A2 will officially return as an entry-level electric model. Meanwhile, Skoda is just days away from unveiling its seven-seat Peaq electric SUV, so there’s still plenty happening on the product-planning front.
2022 Volkswagen T-Roc Cabriolet
Motor1's Take: The VW Group CEO doesn’t mince words: “The next few years are critical.” Whether this sweeping transformation will pay off remains to be seen, but the aggressive restructuring measures should significantly reduce costs across the company and improve the bottom line.
As always, the most important element of any business plan is the product, and there’s plenty in the pipeline across all brands. Not everything available today will survive, as the VW Group takes a closer look at what works to determine what stays and what must go.
