Volkswagen to cut model lineup by half, trim annual production to 9 million vehicles

Volkswagen Group has unveiled a "Future Plan 2030" that calls for cutting its model lineup by up to 50 percent and scaling annual production capacity to about 9 million vehicles, as the automaker moves to sharpen its global competitiveness through sweeping efficiency gains across products, technology and operations.

The group disclosed the plan — which includes 12 core initiatives and targets for 2030 — at a supervisory board meeting Thursday. Volkswagen said it would pursue greater resilience and profitability through a simplified product portfolio, consolidated core technologies, a restructured production network and a reorganized equity portfolio.

The model lineup will be trimmed by as much as 50 percent to focus on the most competitive market segments. Vehicle options and derivative model complexity will also be reduced by up to 75 percent, freeing development and investment resources to concentrate on core products and technologies.

On the technology side, the group plans to integrate platforms, electronic architectures and software environments to generate group-wide synergies and eliminate redundancies, accelerating development and strengthening competitiveness in the process.

Production capacity will also be realigned to match market demand. The group will restructure annual capacity to around 9 million vehicles and further optimize its manufacturing networks in China and Europe. The move is designed to streamline a production system originally built around a pre-COVID-19 target of about 12 million vehicles a year.

In addition, Volkswagen will restructure its equity and investment portfolio to sharpen its focus on core automotive operations. The group plans to deploy roughly 7.4 billion euros ($8.46 billion) in cash secured through the recent sale of a majority stake in Everllence as funding for future growth investments.

The overhaul reflects Volkswagen's effort to fundamentally rebuild its business model amid a sustained decline in profitability. The group's operating profit fell 53 percent last year to 8.9 billion euros, down from 19.1 billion euros the year before. While Volkswagen held onto second place in global sales behind Toyota, the profit slump cost it the runner-up spot in operating profit to Hyundai Motor and Kia.

Volkswagen said it has been restructuring its product, technology and regional strategies over the past three years. The company said battery electric vehicle sales in Europe surpassed those of internal combustion engine vehicles for the first time, and that it topped China's sales rankings in the first quarter of this year.

"By 2030, we will make Volkswagen Group the most attractive automotive company in the world," CEO Oliver Blume said. "With this future plan, we want to make the group faster, more robust and more competitive, and lay the foundation for sustainable success even in an increasingly demanding environment."