Oliver Blume, Chief Executive Officer of Volkswagen Group, recently remarked that the German automotive sector should draw inspiration from China’s disciplined and systematic industrial planning framework. He observed that Chinese stakeholders exhibit a strong sense of strategic planning and well-defined priorities in their actions, and he noted that Volkswagen has witnessed firsthand the remarkable discipline and efficient execution prevalent in the Chinese market. Blume also highlighted the intense competitive landscape in China, where Volkswagen contends with over 150 highly innovative rivals.

Blume reaffirmed Volkswagen’s commitment to reform, outlining plans to streamline operations by reducing the workforce in Germany by 50,000 positions by 2030. Despite a surge in order backlogs, the company remains steadfast in its restructuring endeavors, establishing “clear manufacturing cost objectives” across all facilities and consistently reassessing production capacities. He underscored the necessity of enhancing productivity to counterbalance the high cost structure in Volkswagen’s domestic market. Blume emphasized that the traditional model of developing and manufacturing vehicles in Germany for export is no longer sustainable. Earlier, Volkswagen had projected that factors such as tariffs, expenditures on electric vehicles, and heightened competition in the Chinese market could potentially depress its operating return rate to a mere 4% this year.