Volkswagen AG

According to sources familiar with the matter, labor representatives and the state of Lower Saxony, a major shareholder, are preparing a new counter-proposal ahead of next week's supervisory board meeting regarding the restructuring plan being pursued by Volkswagen (VW) CEO Oliver Blume. Blume addressed more than 10,000 employees at the company's headquarters in Wolfsburg, seeking support for a comprehensive restructuring that could include significant job cuts and potential plant closures, but was met with boos from the audience as workers' opposition intensified. Blume warned that up to 50,000 job cuts might be necessary to maintain competitiveness, roughly double the reduction plan already agreed with unions. Torsten Gröger, representative of the IG Metall union, stated, "If management only pursues job cuts and cost reductions, we will resist with all our might." Spokespersons for the supervisory board, the works council, and the state of Lower Saxony declined to comment, and the specific details of the counter-proposal have not been disclosed.

Volkswagen's CEO has warned of a "more than critical" crisis as the group prepares its largest ever restructuring, including potential job cuts, possible factory closures and broad internal cost reforms. The sweeping overhaul responds to global challenges and intense competition, and has raised concerns over workforce morale and the future shape of Volkswagen's production network. The restructuring decisions can influence how its €37.3 billion business allocates production and jobs across Europe, Germany, North America, South America and the Asia Pacific. The crisis language also cuts across the thesis that electrified models and digital services will steadily improve profitability resilience, especially given the ID.4 battery defect lawsuit and recalls.

Lower Saxony Premier Stephan Weil said on the 24th that as Volkswagen, which is headquartered in the state, works to avoid plant closures, the company's stakeholders need to cooperate to find solutions in order to protect industry in the state. Speaking at a VW plant in Hanover, he said Lower Saxony is a hub for the automotive industry and must remain one. The plant is one of five facing possible closure. Weil sits on the company's supervisory board alongside members of the founding family and worker representatives, and spoke ahead of a series of employee meetings scheduled for this week. At the meetings, employees will have their first opportunity to question CEO Oliver Blume about the restructuring plan he has presented. Blume has said that to improve cost competitiveness, the company may cut a further 50,000 jobs in addition to the 50,000 job reductions already agreed.

A survey conducted by Volkswagen's works council has found that public statements by management have unsettled employees and their families and bred distrust. The survey showed concerns about job security, the future of early retirement and severance schemes, and the outlook for the plants in Emden, Hanover, Neckarsulm, Osnabrück, and Zwickau. CEO Oliver Blume indicated in an internal memo that these four plants are not expected to reach competitive capacity utilization in the 2030s, but stressed that no concrete plant closures have yet been decided. Blume has denied accusations that he is withholding information and is scheduled to address employees at an extraordinary meeting in Wolfsburg on the 25th.

Automakers including Stellantis and Volkswagen are turning to new lubricant blends as motor oil shortages worsen due to the Iran war, the Financial Times reported. Supply chains for high-quality Group III base oils were severely disrupted after Iran struck Shell's gas-to-liquids plant in Qatar in March, and prices have nearly tripled from prewar levels to about $4,000 per ton in Europe and the U.S. Stellantis said it evaluated reformulated lubricants and secured alternative products that meet industry standards, while Volkswagen said it has secured supplies for now and is evaluating additional sourcing options. Toyota and Suzuki have also secured alternative supplies, and Nissan informed dealers of reduced production capacity for most lubricant products and said it would constrain supplies of its high-quality motor oil. Holly Alfano, CEO of the Independent Lubricant Manufacturers Association, warned that alternative suppliers have limited volumes and any renewed shipping disruption, refinery outage or other supply shock could rapidly worsen the situation.

CloudSEK has identified more than 2,500 organisations that may have been potentially affected by a major AI supply chain incident involving LiteLLM in March 2026, with approximately 434,000 automated software-development pipelines linked to the exposure. The potentially affected organisations span critical industries including technology, cybersecurity, banking and financial services, telecommunications, manufacturing, consulting, logistics, and enterprise software, with high-confidence matches associated with major global organisations including NVIDIA, Samsung Electronics, Cisco Systems, Siemens, S&P Global, ServiceNow, Deloitte, Vodafone, X Corp, Zscaler, FedEx, Volkswagen, Thales and London Stock Exchange Group. The incident occurred after cybercriminal group Team PCP compromised LiteLLM, and malicious versions were reportedly available through the Python software repository PyPI for only around 40 minutes, yet CloudSEK's analysis identified approximately 434,000 CI/CD pipelines potentially connected to the exposure. Potentially accessible information included cloud credentials, source-code access, server keys, software-development secrets, AI API keys and other credentials that could give attackers access to critical business systems, and CloudSEK stresses that appearing in the dataset does not automatically mean an organisation was successfully breached but should be investigated urgently. CloudSEK has released a free exposure-checking tool to help organisations determine whether credentials or infrastructure associated with them appear in the identified dataset.

New energy vehicles accounted for 65.1% of new passenger cars sold in China in July, up from 54% a year ago, according to China Passenger Car Association data. Geely’s Xingyuan electric hatchback was the bestseller among the 10 most popular car models in the six months through July, with nearly 197,500 units sold at a price just under 100,000 yuan. Tesla’s Model Y ranked second with more than 180,000 electric SUVs sold, priced between 263,500 yuan and 313,500 yuan. BYD’s most popular model, the Yuan UP SUV, placed fifth with nearly 97,700 units sold, while the company reported a more than 10% drop in passenger car sales in the first half of the year. Volkswagen was the only traditional foreign automaker in the top 10, with its gasoline-powered Lavida in ninth place.

Mercedes-Benz Group AG sold only 1,153 units in China in the first half of 2026, a fraction of the more than 80,000 similarly priced SU7 sedans that Xiaomi Corp. delivered in the same period. The performance echoes the challenges faced by BMW AG, Volkswagen AG, and Porsche AG in China, where all reported second-quarter sales declines of at least 30%, worse than the overall market's drop.

Japanese, Western, and Chinese automakers are facing sales headwinds in China's auto market. In the first half of 2026, Honda's China sales fell 34.6 percent year on year, Toyota Motor dropped 17.1 percent, and Nissan Motor declined 15 percent, with Japanese brands posting double-digit decreases. European players Volkswagen, Mercedes, and BMW saw drops of 20 to 30 percent, while US automaker General Motors slipped 6 percent. Chinese manufacturers also saw domestic sales fall below the previous year for the first time in two years, with EV leader BYD down 16 percent and Li Auto down 5 percent. A rapid expansion of production capacity for new energy vehicles, including EVs, has led to oversupply, pushing factory utilization rates well below the 80 percent breakeven level. The strain of overproduction is spilling over into exports, with so-called zero-kilometer used cars, where new vehicles are shipped overseas as used cars, now accounting for over 90 percent of used car exports, prompting authorities to question BYD and others. NIO CEO William Li expressed a sense of crisis, saying China's auto industry has entered its most brutal phase, as the state-led push to nurture the EV industry reaches a crossroads.

Porsche SE, the investment company of the Porsche and Piëch families that are the controlling shareholders of German auto giant Volkswagen, has sent a clear message to management demanding accelerated cost cuts and a stronger response to Chinese competitors. Porsche SE Chairman Hans Dieter Pötsch said, 'The Volkswagen Group stands at a historic crossroads,' warning that delays in decision-making will only magnify the problems. The company's finance chief, Johannes Lattwein, called for reducing overcapacity, significant cost cuts, and strengthening decision-making. Porsche SE is the largest shareholder of Volkswagen, holding a 31.9 percent stake.

Toyota, Volkswagen, and Mazda are posting sharp sales declines in Australia as electric vehicles and lower-cost Chinese models rapidly reshape the market. Toyota is down 21%, Mazda 17%, Mitsubishi 25.7%, and Volkswagen's 2025 sales have fallen 21% after a 17% drop in 2024, according to a report cited by The Electric Viking. Plug-in vehicles grew from 16% of the market in January to 36% by June 2026 when plug-in hybrids are included, and Chinese automakers now represent seven of Australia's 20 best-selling brands. The upheaval has already seen Fiat exit the Australian market after Citroen and Infiniti, and Peter Jones, chief executive of the Victorian Automobile Chamber of Commerce, warned that brands with under 5% market share are especially at risk. The Australian government has responded to fuel-security concerns by arranging additional petrol and diesel supplies and temporarily cutting the fuel excise, but the overall direction still appears to favor electrification.

Toyota Motor Corporation posted global vehicle sales of 5.39 million units in the first half of 2026, outpacing Volkswagen's roughly 4.13 million units to hold the top spot for a seventh consecutive year, even as the Toyota group's total sales fell 2.8 percent from the same period a year earlier. The decline, the first in two years, was driven by sluggish demand in China and the impact of higher oil prices amid tensions in the Middle East. Overseas sales dropped 4.5 percent to 4.30 million units, while domestic sales rose 4.4 percent to 1.10 million units, supported by the new bZ4X electric vehicle. Global electrified vehicle sales climbed 9.1 percent to 2.71 million units, with all-electric vehicles surging roughly 2.4 times to 193,172 units, both setting first-half records. By region, sales in China fell 17.1 percent to 694,670 units, the Middle East dropped 21.6 percent to 218,855 units, and North America edged up 0.9 percent to 1.45 million units.

European luxury brands and automakers are signaling diverging fortunes amid consumer weakness in China. BMW, Audi, Volkswagen, and Porsche are struggling as Chinese consumers opt for cheaper, better domestic alternatives, while heritage luxury names like LVMH and Kering are holding up better. Ferrari and Rolls-Royce have seen China sales fall but not as sharply as mass-premium auto brands. Hermez said price hikes in 2027 are going to be smaller than this year, which weighed on its shares, while Kering's 1% second-quarter revenue rise was enough to boost its stock.

Thousands of Audi workers demonstrated on Wednesday against the possible closure of the German automaker's Neckarsulm plant as parent Volkswagen pushes ahead with a group overhaul expected to include tens of thousands of job losses. About 6,000 people took part, according to the works council, at the site that employs roughly 15,000 workers producing the A5, A6, A8 and the all-electric e-tron GT. Workers demanded clarity from Volkswagen, whose CEO Oliver Blume has warned Neckarsulm is among four German plants that could close after 2030 if no alternative solution is found. The protest came as rival BMW announced thousands of job cuts, adding to pressure on Germany's auto industry from high costs, growing Chinese competition and U.S. tariffs. Local mayor Steffen Hertwig warned that closing Neckarsulm would be a disaster with far-reaching consequences for the southwestern state of Baden-Wuerttemberg.

German automaker BMW announced on the 29th that it will cut thousands of jobs in Germany by the end of 2027 through a voluntary redundancy programme. The cuts will target management and development departments, while production will be excluded. According to sources, around 8,000 of the company's 150,000 global workforce are expected to go. In the German auto industry, Volkswagen and Mercedes-Benz have also unveiled large-scale job reduction plans amid the shift to electric vehicles, competition with China, and US tariffs.

Audi reported a 12.5% decline in second-quarter revenue for the broader Audi group, which includes Lamborghini, Bentley, and Ducati, to 15 billion euros, or approximately 17.1 billion dollars, amid weaker vehicle sales in China and the United States. Operating profit fell 3% to 533 million euros, yielding an operating margin of 3.6%, well below the company's revised 2026 target of between 5% and 7%. Audi has reduced its full-year guidance and is coordinating with parent company Volkswagen on a comprehensive restructuring, including cutting production capacity at its Neckarsulm factory, one of four German Volkswagen plants facing possible closure after 2030. The Neckarsulm plant's annual capacity has been lowered to 225,000 vehicles, about 75,000 below previous levels, and its night shift will be eliminated. Volkswagen itself reported a 9.5% decline in second-quarter profit as it prepares for difficult labor discussions and further job reductions under CEO Oliver Blume.

The U.S. Department of Justice has charged two Volkswagen engineers with securities fraud for an alleged insider-trading scheme connected to the German automaker's joint venture with Rivian. The indictment alleges that Michael Stamp and Marcus Plank made more than $300,000 in illegal profits by purchasing Rivian stock and options after learning of the planned joint venture, codenamed Project Climb, but before the public announcement on June 25, 2024. Following the announcement, Rivian's stock price rose 23%, and the pair sold their positions, with Stamp realizing about $250,000, Plank about $50,000, and a close family member of Plank about $12,000. The joint venture, initially involving a $5 billion commitment from Volkswagen, has since grown to $5.8 billion, making Volkswagen Rivian's largest shareholder. Stamp and Plank were arrested in San Jose and face up to 25 years in prison if convicted.

Volkswagen AG has warned that annual revenue may decline by as much as 3%, revising its previous outlook of flat growth to a 3% increase, as group deliveries in China fell 37% during the three months through June. The worsening performance in China places further pressure on CEO Oliver Blume's turnaround strategy, with shares falling as much as 3.2% in Frankfurt and extending their year-to-date decline to 31%. CFO Arno Antlitz said the company faces a 30% cost gap against competitors and needs to reduce overhead expenses by at least 10 billion euros, or 11.4 billion dollars. Despite these pressures, management expects earnings to improve in the second half and maintained its projection for an operating margin of between 4% and 5.5%, with the full-year result still expected to exceed the 2025 level. Volkswagen is seeking to rebuild momentum through local partnerships, including work with Xpeng Inc. on new electric models and Audi's development of a China-specific electric-vehicle platform with SAIC Motor Corp.

Volkswagen's profits crashed by 32.9% in the second quarter compared to a year earlier, falling to €1.5 billion from €2.3 billion, as CEO Oliver Blume warned the carmaker faced an unprecedented risk scenario. Sales ticked up to €82.4 billion from €80.8 billion, but the company warned full-year sales could fall by up to 3% after previously expecting growth. The profit drop included a €500 million charge for halting US production of the electric ID.4, while sales in China, once the group's most profitable market, slumped 20% in the third quarter. Blume said a turnaround plan that could involve cutting up to 100,000 jobs was delivering results, but unions and Lower Saxony officials on the supervisory board reportedly rejected his restructuring plan by 12 votes to seven amid major worker demonstrations.

The Trump administration declined to agree to a 16-year renewal of the USMCA free trade pact with Mexico and Canada, citing ongoing trade deficits, and the deal will now be reviewed annually until it expires in July 2036 unless renewed. Mexico and Canada both agreed to the extension, but Washington refused, signaling a negotiating posture rather than an imminent end. Analysts at Seeking Alpha identified automakers as the most exposed, with Ford, General Motors, and Volkswagen heavily integrated into cross-border supply chains, while Mexican auto-parts exporters like Nemak, Grupo Industrial Saltillo, and Grupo KUO face direct risk from potential changes to regional-content requirements. Industrial REITs such as Vesta and Fibra Macquarie, which have benefited from the nearshoring narrative, could see investment decisions freeze if manufacturers delay capital expenditures amid the uncertainty.

Volkswagen's fair value estimate has been trimmed from about €111.54 to roughly €109.02, reflecting updated model assumptions. The long-term revenue growth assumption was lowered from 2.74% to about 2.68%, while the long-term profit margin on sales shifted from roughly 4.16% to about 4.05%. The future price-to-earnings multiple in the model edged up from 5.20x to about 5.23x, and the discount rate remained unchanged at 10.34%. Among analysts, Citi cut its price target on Volkswagen from €110 to €94, and Berenberg reduced its target by €5, while JPMorgan highlighted the company's architecture partnership with Rivian as a positive for longer-term positioning.

The German state of Lower Saxony is considering supporting plans by Israeli defense company Rafael Advanced Defense Systems to move into Volkswagen's Osnabrück plant. VW plans to end vehicle production at the plant in 2027, and Rafael has expressed interest in manufacturing components for the Iron Dome missile defense system there. One option under discussion involves splitting the plant's operations between two companies. Lower Saxony, where VW is headquartered and five of its six western German assembly plants are located, has indicated the plan could succeed, while Qatar, a major VW shareholder, has raised concerns. VW is also considering having the state take over the entire plant before transferring it to Rafael, which would make the state government responsible for employees and future restructuring costs. Facing high domestic costs, overcapacity, and intensifying competition from Chinese companies, VW is planning structural reforms including reducing vehicle models and production capacity, which could result in the loss of around 100,000 jobs.

Volkswagen CEO Oliver Blume warned employees on Monday that the automaker may need to eliminate another 50,000 jobs worldwide as it scrambles to close a 20% cost gap with rivals and avoid shutting German factories. The company has already agreed to roughly 50,000 reductions across the group, including at Audi and Porsche, and adding Blume's "theoretical deduction" would bring potential cuts to about 100,000 positions. Blume said Volkswagen preferred "intelligent solutions" to plant closures but could not yet identify competitive long-term uses for facilities in Emden, Hanover, Zwickau and Neckarsulm. The warning follows a sharp business downturn, with second-quarter global deliveries falling 8.6% and deliveries in China plunging 36.6%, while tariffs are costing Volkswagen about 5 billion euros in annual operating profit. Labor representatives blocked Blume's broader restructuring proposal in a 12-7 supervisory board vote last week.

Volkswagen introduced a new compact electric SUV priced at approximately €28,000 as European consumers shift away from gas-powered vehicles. The ID. Cross is now available for order, with a smaller battery version to follow, and it expands Volkswagen's lineup of lower-cost electric vehicles that includes the new Polo, Cupra Raval and Skoda Epiq, all to be manufactured in Spain. Sales of battery-electric and plug-in hybrid vehicles in Europe rose 29% through the first five months of this year, accounting for more than one-third of total registrations, aided by government subsidies in Germany and France and elevated fuel prices. The launch comes as Chinese automakers such as BYD and Chery captured 10% of the European market for the first time in May, with Chery's Jaecoo 7 SUV ranking as the third-most-popular model in the UK during the first half of the year. Volkswagen CEO Oliver Blume said last week the company was surprised by how quickly Chinese manufacturers gained market share, and Europe has become more important as Volkswagen's sales decline in China and US demand efforts face challenges, while the company also discussed restructuring plans that could include cutting up to 100,000 jobs globally and potentially closing German manufacturing facilities.

Volkswagen CEO Oliver Blume has warned staff that a further 50,000 jobs could be axed, the first internal acknowledgement that total cuts may reach 100,000. The group has already agreed to 50,000 job losses, including at its Porsche and Audi divisions. In an internal memo, Blume said the company had identified a 20% cost disadvantage relative to peer firms, necessitating additional cuts, which translates into a theoretical deduction of another 50,000 positions globally. Labour representatives on the supervisory board rejected the proposals, which reportedly included job cuts and the possible closure of four plants. Blume indicated a preference for intelligent solutions over closures, pointing to defence sector work or the production of Chinese VW models in Europe as possible uses for underutilised sites.