Volkswagen confirms Future Plan 2030 restructuring, slashes 2026 profit outlook and launches global steering recall

Future Plan 2030: what Volkswagen has approved

Volkswagen AG's supervisory board has agreed to a comprehensive restructuring plan dubbed Future Plan 2030, which the company described as essential to restore competitiveness and secure the group for the future, Reuters reports. The group has been struggling in the face of slumping demand and increasing competition from China. As part of the plan, Volkswagen says it will need to cut a further 50,000 jobs, including management positions, essentially doubling current layoffs across the group. ⁶

On products and scale, Reuters reports the group aims to cut its model range by about 50 per cent and reduce complexity by about 75 per cent by 2035, to focus on a smaller number of higher-volume models and achieve greater economies of scale. It will tailor platforms, electronics and driver assistance systems to the needs of both Western and Eastern hemispheres. Volkswagen says it aims to sell 9 million vehicles a year and is targeting an operating margin of 9 per cent by 2030, compared with 3.8 per cent in the first half of 2026. The plan also includes €135 billion (about $157 billion) in capital spending and research and development investment between 2027 and 2031, flatter management structures, faster decision making and a roughly one-third reduction in the number of businesses and holdings the group owns. ⁶

CarExpert reports Future Plan 2030 aims to increase the operating profit of Europe's largest automaker to €31 billion (A$50.3 billion) and triple its operating profit margin to 9.0 per cent by the end of the decade, requiring massive cuts to Volkswagen's model range and workforce. CarExpert adds that up to 100,000 VW employees are reportedly at risk of losing their jobs and up to four German factories are facing closures in the coming years, while group subsidiary Seat could be a further casualty as the Spanish automaker focuses on the higher-volume and more profitable Cupra brand. ²

Plants at risk and the European production timetable

Volkswagen says it cannot guarantee future production allocations for its plants in Emden, Zwickau, Hanover and Neckarsulm from 2031 to 2034, with alternative uses for those sites being evaluated, Reuters reports. The company says its European factories currently have more than 500,000 units of excess capacity. RTÉ reports Volkswagen will put together a European production plan by the end of June 2027, a period it describes as key for the plants already at risk, and that the four plants are scheduled to close on a staggered basis from 2031 until 2034. Possible solutions could include pivots to defence or Chinese partnerships, but no concrete plans have emerged so far, according to RTÉ. ⁶¹

RTÉ reports that about half of the 50,000 additional job cuts are likely to occur in Germany, and that Volkswagen is restructuring elsewhere too. The company has already cut its workforce in China from 90,000 to 70,000 as it adapts to falling sales, with more reductions expected and Chinese production facing 500,000 vehicles of capacity cuts. The group will also focus on its most profitable market segments in North America, Reuters reports, adapting to revised growth expectations in China and looking to expand exports to the Global South. RTÉ adds Volkswagen must still settle whether premium brand Audi should get its own US production site, and wants to pivot towards the most profitable US segments such as pick-up trucks and large SUVs. ¹⁶

Labour standoff over German job cuts

Labour reaction remains a live constraint on the plan. Reuters reports labour representatives say they support the plan but that the burden should not be carried only by employees, stressing the need to develop future prospects for all plants and save as many jobs as possible. RTÉ reports Germany's top industrial union is bound to a strike truce until 1 January 2027, with IG Metall representatives expected to meet management on 30 September to discuss concerns that the overhaul could breach a 2024 labour agreement. That deal ushered in a first wave of 35,000 layoffs in Germany in return for employment guarantees until the end of the decade and investment in plants now on the chopping block. ⁶¹

RTÉ reports that, despite dropping their opposition to the broad plan at a board meeting three weeks earlier, labour representatives and the state of Lower Saxony, Volkswagen's second-largest shareholder, are still fighting to stem local job losses. Unions want the 25,000 planned German job cuts to be a starting point for negotiations focused on cost rather than a numerical layoff target. RTÉ also notes the 2024 agreement allows the parties to agree a four-day week for workers if Volkswagen gets into financial difficulty. Separately, ad-hoc-news.de reports Porsche's leadership is resisting plans to cut around 4,100 positions at the Stuttgart sports-car subsidiary, and that employee representatives staged nationwide protests demanding countermeasures from management and policymakers. ¹⁴

Profit warning and €10 billion in special charges

Volkswagen slashed its full-year 2026 outlook roughly a week before the recall news broke, according to ad-hoc-news.de. Management now expects an operating return on sales of at most 1 per cent for 2026, a retreat from the previously targeted range of 4.0 to 5.5 per cent. The revision reflects roughly €10 billion in special charges, including approximately €6 billion in impairments tied to the group's stake in Porsche AG, while revenue is still expected at around €315 billion. The earlier 4.0–5.5 per cent range was the outlook Volkswagen Group itself issued with its 2025 annual results in March 2026, when it also guided to sales revenue growth of 0 to +3 per cent and net cash flow of €3 billion to €6 billion for 2026. ⁴³

The group's most recent full-year results underline the deterioration. Volkswagen Group's March 2026 results statement shows 2025 sales revenue of €321.9 billion, broadly stable year on year, with an operating result of €8.9 billion, 53 per cent below 2024, and an operating margin of 2.8 per cent. The company attributed the decline to US tariffs, expenses connected with the adjustment of the Porsche product strategy, currency effects and price/mix effects. Adjusted for special effects, the operating result was €14.8 billion, a margin of 4.6 per cent, which CFO and COO Arno Antlitz described as not sufficient in the long run. Worldwide deliveries fell 6.3 per cent in the first half of 2026, with Chinese sales down 26 per cent over the same period, according to ad-hoc-news.de, as Western manufacturers lose ground to domestic rivals in China's leading electric-vehicle market. Volkswagen shares closed at €71.90 on the Friday reported by ad-hoc-news.de, down 31 per cent since the start of the year, though Global Banking & Finance Review separately records a close of €73.15 on 23 September 2026. ³⁴⁵

Precautionary global recall over steering risk

Volkswagen has confirmed a recall of around 2.86 million vehicles worldwide over a potential steering risk, according to the German transport authority KBA as reported by RTÉ. The affected models include VW's Tiguan, Touran, Golf and Caddy vehicles built between 2013 and 2024, and around 700,000 Audi models built from 2017 to 2024, the KBA said in brief statements. RTÉ reports the KBA said corrosion could cause a bolt to fracture, leading to steering failure, though no such incidents have been reported. A Volkswagen spokesman described the measure as precautionary, saying there have been no human injuries and that drivers can continue using the vehicles until obtaining a dealer appointment for bolt replacements. ¹

The scale of the campaign is reported differently across outlets: ad-hoc-news.de describes a global campaign exceeding four million cars, with Germany's KBA listing 2.16 million vehicles for the core Volkswagen brand alone, and notes the US safety regulator NHTSA has warned that affected models, among them the Volkswagen Tiguan and Audi Q3, could lose steering function. Volkswagen has classified the measure as precautionary. RTÉ separately reports that only a handful of cars sold in Ireland are affected, according to Volkswagen Ireland, and that Handelsblatt reporting carried by Global Banking & Finance Review also put the recall at four million cars. The differing totals have not been reconciled in the reporting. ⁴¹⁵

Industry context: Mercedes-Benz weighs German plant closures

Volkswagen is not alone among German manufacturers in confronting structural cost pressure. CarExpert, citing a Carscoops report, says two of Mercedes-Benz's German-based factories — one vehicle assembly plant and one powertrain facility — are at risk of being shut down amid negotiations over new cost-saving measures with IG Metall. Mercedes-Benz production chief Michael Schiebe was quoted saying the company's clear goal is to maintain all of its German locations, but that if it is unable to do so it would have to close one German assembly plant and one German powertrain plant. Mercedes-Benz currently has seven operational powertrain factories and three vehicle assembly plants in Germany, and it is unclear which sites are at risk. ²

CarExpert reports the union responded that threatening plant closures is no way to shape the future and that anyone resorting to such threats must expect its determined resistance. Contributing factors include Mercedes-Benz sales plummeting in China and a US$1.1 billion (A$1.57 billion) loss to US tariffs in 2025, according to CarExpert. CarExpert also notes Volkswagen group-level moves beyond the core brand, including Porsche selling its major stakes in Bugatti Rimac for nearly €1 billion (A$1.62 billion) and Audi selling its majority stake in design and engineering firm Italdesign, while ad-hoc-news.de reports the future of the Seat brand is still being evaluated by the company beyond the current product cycle. ²⁴