Volkswagen to halve its production capacity

Volkswagen’s production will be cut under a compromise that will also prevent job cuts and plant closures until 2030, reports the Financial Times.

The German carmaker plans to halve its production capacity after Arno Antlitz, chief financial officer of VW group, said the company would only invest in competitive plants.

Some of the company’s plants, including in Zwickau and Dresden, will have to cut costs by 20% to keep production lines open.

Overall, Volkswagen will reduce production from 1.5 million vehicles to 750,000. Its plants in Germany produced about 900,000 cars last year.

The sharp decline is a clear sign that Volkswagen does not expect its sales in Europe to grow, especially as Chinese competitors enter the market.

Volkswagen intends to keep its production facilities open and its employees employed until 2030, but the German automaker still plans to cut 35,000 jobs through early retirement and voluntary redundancy.

Nevertheless, Volkswagen’s production will undoubtedly undergo significant changes in the next five years.