Despite being the second best-selling automaker in 2025 with 8.98 million units sold last year, Volkswagen Auto Group (VAG) is undergoing a major restructuring as competition from Chinese automakers becomes more heated.

In their latest announcement, Volkswagen announced that it plans to cut 50,000 jobs, as well as impose a staggered end to current production at four of its plants in Germany: Emden, Hanover, Neckarsulm (Audi), and Zwickau. The staggered shuttering of the four factories will take place between 2031 and 2034, although no specific plans were revealed by Volkswagen.

The decision to cut 50,000 jobs is part of Volkswagen's turnaround plan to cut costs and streamline models, as competition from Chinese automakers continues to rattle legacy automakers. In fact, another 50,000 job cuts are expected to happen on top of the current 50,000 that are already underway. This brings the brand's upcoming total job losses to 100,000 by 2030.

Volkswagen also admitted that there's an overcapacity in Europe to produce 500,000 vehicles for which there was no market. Combined with decreasing sales in China and high US tariffs, Volkswagen will need to rethink its plans for the long-term, as well as recheck its finances amid the restructuring.

Moreover, China used to be Volkswagen's cash cow, but with local automakers getting a larger share of vehicle sales in the People's Republic, profits from Volkswagen's China businesses and joint ventures have plunged to new lows over the past decade. In fact, the Chinese market used to deliver roughly EUR 4 – EUR 5 billion in profits. Now, that figure is down to less than EUR 1 billion.

Besides cutting jobs worldwide, Volkswagen is also expected to slash models across group brands. This is part of the brand's aforementioned plan to close several factories.