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following overseas markets, volkswagen group may launch a layoff plan in the chinese market.

bloomberg recently reported that volkswagen group will lay off employees in china in phases. people familiar with the matter revealed that the group is expected to lay off hundreds of local employees, and the high-end brand audi will also start a layoff plan.

in this regard, volkswagen china told the reporter of daily economic news: "volkswagen group (china), like all other departments, actively participates in and supports the global performance plan. specific measures include adjusting the organizational structure, improving the digital level of work processes, strengthening the coordination between brands and departments in china, and strengthening the localization of projects."

volkswagen group (china) said that volkswagen group (china) is continuously improving the efficiency of various departments and projects and optimizing costs. the relevant measures also involve direct labor costs and indirect labor costs including administrative expenses, travel expenses and training costs.

the reporter also further asked whether there are any specific arrangements for the current china regional performance plan, but the volkswagen group stated that only the above information is available for the time being.

it is reported that when the full-year results for 2023 were released, volkswagen group stated that it was implementing the largest performance plan in the group's history, striving to achieve a sustainable financial effect of more than 10 billion euros across the group by the end of 2024 to resist the impact of factors such as inflation and rising costs. the performance plan is for all brands under the group.

the reporter checked public data and found that in the process of promoting electrification transformation, volkswagen group faces multiple pressures from products and sales.

in the first half of 2024, volkswagen group's revenue was 158.8 billion euros, a year-on-year increase of 1.6%, but its operating profit was about 10.1 billion euros, a year-on-year decrease of 11.4%. in the first half of the year, volkswagen group's global sales were about 4.35 million vehicles, slightly lower than 4.37 million vehicles in the same period last year.

at present, although the sales of volkswagen group's id series models have increased, there is still a gap compared with domestic new forces car companies. according to data previously released by volkswagen group, its sales in the chinese market in the first half of the year were 1.345 million vehicles, a year-on-year decrease of 7.4%.

in the global market, volkswagen group announced a series of adjustments in germany in early september. to further cut costs, volkswagen group is considering closing one of its car manufacturing plants and a parts plant in germany. then on september 11, volkswagen group announced that it would end the 30-year employment guarantee agreement it had previously agreed to.

since september, volkswagen group has accelerated the adjustment of its production models, and has successively announced the suspension of production of id.4 in the united states and the cessation of production of polo models in spain.

yan jinghui, a member of the expert committee of the china automobile dealers association, said in an interview with reporters that the revenue, gross profit margin and overall corporate profits that were lower than expected have forced automakers to consider optimizing their cost structure. among them, methods commonly used in the past such as layoffs (i.e. reducing staff and increasing efficiency) have been mentioned again to cope with market pressure.

however, yan jinghui also told reporters that overall, the volkswagen group is currently undergoing a phased adjustment in its transformation process. as a developing market segment, the new energy market is still in the investment stage and most new energy manufacturers have not yet achieved profitability.

an automotive industry practitioner also analyzed to reporters that the volkswagen group’s current basic foundation is still accumulated, and it has laid out electric vehicles and hybrid routes, and its products in 2024 and 2025 are still worth looking forward to.

earlier, the reporter learned that volkswagen group intends to control the scale of investment within 170 billion euros in the five-year plan from 2025 to 2029. the funds will be mainly invested in new products, regional markets, battery business, pure electric vehicle platforms, and advanced fuel vehicle models with continuous hybridization.

according to the plan, volkswagen group will provide at least 30 pure electric models in the chinese market by 2030, and 30 (china) locally produced fuel and hybrid models by 2027.

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