Volkswagen announces massive austerity plan: 20% cost cuts by 2028
Volkswagen forces note with 20% savings plan to survive the "Trump Era" and the Chinese assault
WOLFSBURG — In a move that signals a state of “maximum urgency” at the heart of the German auto industry, Volkswagen Group has outlined a drastic new restructuring plan. Under CEO Oliver Blume and CFO Arno Antlitz, the car giant is targeting a 20 percent cost cut by the end of 2028, a goal that could break decades-old taboos, including the closure of factories in Germany.
A plan born behind closed doors
The information, originally leaked to Manager Magazin, describes a tense closed-door meeting where the group's leadership presented the harsh reality to the 120 top managers. The message was clear: the current business model can no longer sustain profitability in a world that has changed radically in the past two years.
Although Volkswagen has already managed to save tens of billions of euros through a program launched three years ago, the new figures indicate that the “belt tightening” is just beginning. “We have to lower the profitability threshold,” Blume is reported to have said, suggesting that the group must be able to generate profit even in much weaker market conditions.
The "Perfect Storm": China, Trump and the Electric Competition
Why now? The group is facing what analysts call a “perfect storm” caused by three major factors:
- Decline in China: The Chinese market, once the group's "cash cow," has become hostile terrain. In 2025, VW's deliveries in China are set to fall by 8%, while local electric car makers (such as BYD) dominate future segments.
- US tariffs: Donald Trump's return to the White House has brought with it an aggressive tariff policy. German exports to the US had already fallen by around 14% at the end of last year after Washington imposed tariffs of at least 15% (with threats of up to 50%) on European vehicles.
- The difficult electric transition: Enormous development costs for electric software and platforms, superimposed on fluctuating demand in Europe, have put huge pressure on liquidity.
End of an era: Factory closures?
The most sensitive part of the new plan is the possible closure of some production facilities. Recently, Volkswagen took a historic (and painful) step by closing the “Glass Factory” in Dresden at the end of 2025, becoming the first plant to close in the group’s 88-year history in Germany.
The Osnabrück plant is also under scrutiny, and tensions with unions are at an all-time high. Daniela Cavallo, head of the employee council, reminded management that there are agreements in place to protect jobs until 2030, but financial pressure seems to be rapidly eroding these guarantees.
"The situation is characterized by highly contested markets and huge investment needs. We have no room for error." — Excerpt from an internal group memo.
What's next?
All eyes are now on March 10, 2026. Then, Oliver Blume will present the official financial results for 2025 and, most likely, will detail the mechanisms by which he will cut that 20% of expenses.
In an industry where "Made in Germany" has long been synonymous with invulnerability, Volkswagen is facing its biggest test of adaptability since the Dieselgate scandal. Whether the new plan will save the giant or lead to a fragmentation of the group's brands remains to be seen.
The situation of the VW group in Romania at the beginning of this year
While cold calculations are being made at the headquarters in Wolfsburg to close some plants, in Romania, the Volkswagen Group seems to be living a parallel reality. Data from early 2026 confirm an interesting paradox: although the German giant is restructuring globally, it remains in a position of strength on the local market, benefiting from a historical "capital of trust" from the Romanians.
1. Iron dominance: One in four cars is a Volkswagen
According to registration data from 2025 and January 2026, the Volkswagen Group continues to dominate the domestic automotive landscape.
- Market share: In 2025, the Volkswagen brand reached a registration share of 26.59% of the total market (new and used cars combined). Practically, a quarter of the car fleet entered circulation last year bears the VW logo.
- Ranking: In the new car segment, Skoda (part of the group) consistently maintains its position on the podium (3rd place), surpassed only by Dacia and Toyota. The Volkswagen brand follows closely in 4th place.
2. The Hybrid “Explosion”: Leaders in the PHEV Segment
If globally the group suffers from the slow transition to electric vehicles, in Romania it has found the "recipe for success" through Plug-in Hybrid (PHEV) models.
- Record growth: In 2025, sales of Volkswagen PHEV models in Romania increased by a staggering 414%.
- Star models: The new Tiguan PHEV has become the best-selling model in its category, with Romanians preferring the electric range of over 100 km combined with the safety of the internal combustion engine for long journeys.
3. The Second-Hand Market: The "Engine" That Doesn't Stop
The trend remains upward in terms of the total volume of the group's vehicles entering the country. Romanians continue to prefer the German group's cars due to:
- Resale values: VW, Skoda and Audi remain the brands that best retain their price over time.
- Service infrastructure: The availability of parts and specialized mechanics makes these cars the first choice for customers in the province.
Trend in 2026: Resilience in the face of market decline
Although January 2026 brought an overall 33% drop in new car sales in Romania (against the global economic context), the group's brands demonstrated greater resilience than French or American competitors.
"The Romanian doesn't just buy a car, he buys an investment. In times of uncertainty, such as this beginning of 2026, customers take refuge in well-known brands, and the VW Group is the direct beneficiary of this behavior," explain local auto analysts.
Conclusion: A market "immunized" to the crisis in Germany
While Oliver Blume is looking for solutions to reduce costs by 20%, the Romanian division seems to be the group's "oasis of stability". The challenge for 2026 will be to maintain this lead in the face of the increasingly aggressive offensive of Chinese brands (such as BYD or MG), which have started to appear in the Top 10 in Romania as well.