German automaker Volkswagen on July 9 said it would reduce the number of models it offered by as much as half in order to cut costs and better compete with Chinese companies. According to The New York Times, VW did not say what those changes would mean for workers who have been bracing for large job cuts and factory closures. German media had reported earlier in the week that the company was preparing to lay off 100,000 workers by 2030, and could shut down the Zwickau, Emden, Hanover, and Neckarsulm manufacturing plants.

According to Motor1.com, the company also plans to reduce the number of available options for the surviving models by up to 75%, meaning customers will have far fewer choices when it comes to customizing their cars.

Further, the VW Group is also reducing its annual production capacity to just nine million units; a significant drop from 12 million vehicles pre-COVID.

According to the Guardian, on July 9 the workers' union IG Metall organized demonstrations involving shop stewards and union council members at 18 VW sites, including at its headquarters. The union told the chief executive, Oliver Blume, that he could not “pass the buck for failures of recent years on to the workforce”.

The carmaker's announcement, made after a board meeting, seemed to be an attempt to weather the global shift away from fossil fuel cars and toward electric vehicles, which has threatened many established carmakers and enabled the rise of Chinese automakers.

In a video statement, Blume said there was a need to “get rid of excess capacity,” implying that the company could still close factories.

“The geopolitical situation has become more critical in the last 12 months,” Blume said, adding, “The next few years will decide who will play a decisive role in the automotive industry.”

Volkswagen of America, situated in a country that is bucking the global shift to EVs, meanwhile announced positive results for Q2 and H1 of 2026. The company, based in Reston, Virginia, said its Q2 2026 sales increased 24.9% year-on-year compared to Q2 2025, and that it sold 2.3% more vehicles in the first six months of 2026, compared to the same period in 2025.

Volkswagen’s brands include Audi, Porsche, Skoda, Lamborghini and Bentley, and it owns 88% of Traton, which makes MAN, Scania and International trucks. It has 111 production facilities on every continent except Australia and Antarctica, according to the company’s website. It is the world’s second-largest automaker, calculated by number of vehicles sold, after Japan’s Toyota.