The Volkswagen Group aims for a change of pace in its industrial strategy with the goal of improving the quality and profitability of its vehicles by drastically reducing range and complexity. The German giant’s management attributes a strong warning signal to the significant drop in profits in the first half of 2026, with a margin of just 3.8%, considered an indicator of the urgency of a deep restructuring. In this context, reducing the number of models sold by up to half becomes the main tool to lighten costs, overlaps, and the dispersion of resources across too many variants.
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Volkswagen will halve the number of models
The announced plan also includes significant cuts in general costs, with the intention of eliminating up to 100,000 jobs globally. In parallel, to increase margins, the company intends to reduce the excessive complexity of its offering: fewer lines, fewer configurations, and above all fewer duplications between “sister” brands of the group – Volkswagen, Audi, Skoda, Seat, and Cupra – which in some segments compete with each other with technically very similar products. The reasoning is to concentrate budgets and expertise on a few well-identified proposals, improving innovation, technologies, equipment, and quality of individual models, in order to achieve higher volumes with a more targeted portfolio.
Focus on efficiency and profitability
To achieve simplification, Oliver Blume indicated that the first phase will involve cutting the large number of variants related to trim levels and equipment packages, which are responsible for most of the efficiency losses, with the promise that customer choice will remain significant. The company states that it wants to reduce up to 75% of options without affecting the “substance” of the product, and to increase component sharing (such as seats and windshields) to drastically lower supply chain complexity, by up to 90%. Regarding the withdrawal of entire model lines, however, the process is described as gradual: quickly eliminating a product from the market before the end of its production cycle would be costly and would block the lines, so rationalization should happen step by step, although unconfirmed rumors remain about possible models involved.
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