Volkswagen to slash model lineup and shrink capacity — but no word on job cuts

Volkswagen's management plans to drastically reduce its model lineup and further cut capacity, although the German auto giant stopped short of announcing any job cuts following tense stakeholder talks.

Europe's largest automaker on Thursday said the model lineup will be gradually cut by up to half over the coming years as it concentrates on the most attractive market segments. Production capacity, meanwhile, will be reduced to nine million vehicles per year, compared to a goal of 12 million before the coronavirus pandemic.

"With our future plan, we are moving into the next phase of transformation by our own means," Volkswagen CEO Oliver Blume said in a statement. "We are making the Volkswagen Group faster, more resilient and more competitive," he added.

The update followed a high-stakes boardroom showdown with the group's supervisory board on Thursday and comes after reports that the company is weighing up shutting four German factories and implementing as many as 100,000 job cuts. The mass layoff plan, which would represent the most radical overhaul in the firm's nearly 90-year history, is staunchly opposed by German lawmakers and powerful labor unions.