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VW's German Plants Cut Costs by 30%
18 Dec, 2025
Summary
- Volkswagen's core brands slashed factory costs by 30%.
- 25,000 workers accepted partial retirement or severance deals.
- New small electric car to launch next year at 25,000 euros.
Volkswagen is advancing its cost-reduction strategy, with its core brands' plants in Germany seeing an average cost decrease of 30%. This financial restructuring has also resulted in 25,000 employees accepting partial retirement or severance packages, as the automaker navigates increased competition and a slower transition to electric vehicles.
The company aims to demonstrate that competitive car manufacturing is achievable in Germany. An agreement reached in December 2024 with unions outlines a significant overhaul of German operations, targeting 35,000 job cuts by 2030. This move addresses challenges posed by cheaper rivals and the evolving automotive market.
In line with its electric future vision, Volkswagen will not offer combustion engines in its new small-car family. The first model, the ID.Polo, is expected to debut next year with a starting price of approximately 25,000 euros, underscoring the commitment to electrification in this segment.
