Volkswagen sales plunge as German automaker lays out plan to slash number of brands

Volkswagen reported an 8.6% drop in second-quarter sales, with a significant over one-third decline in China, prompting the German automaker to announce plans to reduce its model lineup by up to half. This strategic shift, aimed at increasing competitiveness and efficiency, comes amidst geopolitical tensions, rising costs, and increased competition. The core Volkswagen brand saw a 14% decrease in deliveries, while Audi and Porsche also experienced declines. Despite these challenges, sales grew for Lamborghini, Skoda, and the trucks unit, as well as in the Americas and Europe. The company cited an "increasingly demanding environment" as the reason for these changes.

Volkswagen's supervisory board is set to review a radical transformation plan that includes potential job cuts of up to 100,000 and factory closures. The influential IG Metall union has organized protests at 18 German sites, including VW's headquarters, to oppose these proposals. The plan, drawn up by CEO Oliver Blume, reportedly involves closing four German plants: Hanover, Emden, Zwickau, and Audi's Neckarsulm site, with up to 50,000 additional job cuts linked to these closures. The union warns that the company cannot blame the workforce for past failures. The board meeting is seen as a significant test for the future of the German economy, given the car industry's large employment base.