Volkswagen said Thursday that it would cut the number of models it offered by as much as half to reduce costs and better compete with Chinese companies. But the German carmaker did not say what those changes would mean for workers who have been bracing for large job cuts and factory closures.
The plan, released after a board meeting, seemed to be a tacit acknowledgment that the company had gotten too big and complicated and needed to slim down to survive the global shift from fossil fuel cars to electric vehicles. That transition has upended many established carmakers and enabled the rise of Chinese automakers.
In recent days, German press reports had suggested that the company was preparing to lay off 100,000 workers by the end of the decade and close four factories in Europe.
Such drastic cuts would be out of character for Volkswagen and German industry, which tend to prefer gradual changes. Labor representatives and political leaders from the German state of Lower Saxony have a majority on the company’s 20-person supervisory board and had signaled that they did not support deep cuts.
Still, some pain seems inevitable. The company said it would aim to produce nine million cars a year, compared with a goal of 12 million before the Covid-19 pandemic and 10 million more recently. In a video statement, Oliver Blume, Volkswagen’s chief executive, 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,” Mr. Blume said, adding, “The next few years will decide who will play a decisive role in the automotive industry.”
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