The global auto industry has endured countless shake-ups since Germany’s Volkswagen Group was founded in 1937: wars, economic crises, political instability, oil shortages, trade disputes, changing consumer preferences, and the arrival of life-changing technologies. Come to think of it, every one of those impacts seems as relevant today as at anytime in the last 89 years.
Today in Munich, VW Group hosted its virtual annual meeting, and CEO Oliver Blume talked about how the company has been coping with the turmoil, how it’s cutting 50,000 jobs by 2030 to be more profitable, and how it’s banking on 20 new vehicles launching this year to feed the recovery.
Volkswagen Group chief Oliver Blume is renwoned for having great relationships with the blue-collar workers and well-heeled investors.Volkswagen
Yes, the company posted a 2025 net profit of $7.5 billion, which is considerably more than the $2.7 billion General Motors earned and a lot more healthy than the losses posted by Ford and Stellantis. But today, Blume identified several trouble spots for VW, and he didn’t even talk in detail about the disappointing first-quarter 2026 vehicle sales.
VW Group deliveries were down 4% globally (to 2 million units), including sizable declines of 13.3% in North America and 14.8% in China. Individual brands also struggled in the first quarter, with sales off 7.6% for VW, 6.1% for Audi, 9.9% for Bentley, 11.7% for Lamborghini, and 14.7% for Porsche. EV sales across VW Group were down 7.7% from Q1 2025 to 200,000 units.
VW’s Old Model Doesn’t Work Anymore
Lamborghini Fenomeno Roadster in natural light.Lamborghini
But Blume was focusing more broadly on VW’s business model, which he said was successful for decades but doesn’t work today: “Develop a world car in Germany, produce it in Europe, and sell it all over the world.”
While he said VW Group already has been “fundamentally restructured,” the business needs further refinement with broader global reach, driven by technology and consistent execution. “Our situation is tense and demanding,” Blume said.
“We are once again at the forefront of competition with our products. But we are not making enough money with them.”
–VW Group CEO Oliver Blume
1997 Mk4 Volkswagen Golf GTIVolkswagen
Hitting the bottom line, Blume said, are geopolitical crises that have disrupted markets and supply chains, along with new tariffs, trade barriers, and increasing regulation (although not in the US, with regard to emissions). The cost of doing business isn’t going down. “Markets are changing faster – or even collapsing completely,” Blume said. “At the same time, we are going through the most significant transformation in our industry.”
Related
VW Expected To Announce Massive Job Cuts This Year As Part Of Cost-Cutting Plan
Tens of thousands of jobs at VW are going away.
As VW announced in March, significant downsizing is on the table. Combined, Volkswagen brand, Audi, Porsche, and the software subsidiary CARIAD will eliminate 50,000 jobs in Germany by 2030. White-collar headcount is not being spared at parent company Volkswagen AG, where 19,000 will be gone by year’s end. VW Group already has binding agreements for 28,000 departures by 2030, and factory costs at German sites were reduced by more than 20% in 2025. The company is banking on net savings of $6.8 billion by 2030.
2027 Audi A6 AllroadAudi
It may be of little solace to those losing their jobs, but the solution, as it has been in every automotive or economic downturn of the past 125 years, is simple: Build a product that is compelling enough to earn a chunk of a thrifty family’s budget.
Blume said VW brand is “forging ahead with the largest model campaign in its history,” with several small EVs geared for the home market, including the ID. Polo, ID. Polo GTI, ID. Cross, and ID.3 Neo. With US production having been discontinued in Tennessee of the all-electric ID.4 crossover and the ID. Buzz on pause here until the 2027 model year, it is unlikely any of these new compact VW EVs will make it to America.
Slow-Rolling Plans For North America? No Way
2027 Volkswagen AtlasBrett T. Evans/CarBuzz/Valnet
Like many legacy automakers, VW’s bet on booming EV sales in the US by now did not pan out. But the all-new 2027 VW Atlas, assembled in Chattanooga, arrives later this year with internal-combustion power, and eventually a hybrid.
On the luxury front, Audi fans this year will be able to shop three new models, the Q7, Q9, and RS5 plug-in hybrid. The compact all-electric Audi A2 E-Tron will debut in Europe this fall, but don’t expect to see it in US showrooms.
Volkswagen Chattanooga assemby plant ID.4 2024Volkswagen
With tariffs on imported vehicles and with low-level market share in the US, one might think VW is slow-rolling its plans for North America. But Blume says otherwise, realigning its regional strategy and operations to focus on the right vehicles, such as the Atlas.
“We believe the USA is the region with the largest growth potential for Volkswagen Group.”
Scout Terra and Traveler and CEO Scott Keogh at Scout Motors Innovation Center in Michigan.Tom Murphy | CarBuzz | Valnet
Construction is underway for the North Carolina factory to build extended-range and EV trucks and SUVs from the revived Scout brand, “and we are also reviewing expanding partnerships and localizing Audi products in the United States,” Blume said. Perhaps the North Carolina plant will have room for an Audi assembly line?
CarBuzz Insight – Why This Matters:
VW Group is the caretaker of eight European car brands, and it’s the big-ticket ones (Porsche, Audi, Lamborghini, and Bentley) that resonate the most with deep-pocketed US car buyers. It’s been a long time since the VW brand had a legitimate gotta-have hit that went toe-to-toe with Toyota, Honda, Ford, Hyundai, or any other high-volume mainstream brands. The ID. Buzz EV was supposed to be it, but the $60,000 base price missed the mark badly.
Related
Scout Pickup Truck Reportedly Delayed Again, May Not Arrive This Decade
The automaker isn’t discussing specific models, but a new report claims the Terra pickup won’t launch until the next decade.
Overpriced mainstream VW brand vehicles have been a problem in the US for 20 years, and it’s surprising how little progress VW has made on this front, despite incremental steps along the way. Maybe it’s easier for Oliver Blume to focus on the high-end VW Group offerings in the US because they represent better profit margins. But the overseer of the “people’s car” brand must spread his attention among 150 countries that receive its products, while signing checks for 660,000 employees worldwide.
Source: Volkswagen Group
