The VW Group Is Gutting Its Lineup. Up To Half Its Fashions Might Die

We knew issues have been unhealthy on the Volkswagen Group for some time, however the severity of the scenario is downright stunning. In a worrying press launch issued simply minutes in the past, the German automotive conglomerate revealed a sweeping plan to drastically downsize, not in a number of years, however “with speedy impact.” It intends to cut back its mannequin lineup throughout its manufacturers by as much as 50 p.c. Sure, the portfolio could possibly be reduce in half, leaving solely the fashions competing within the “most engaging market segments.”

That’s not all. The variety of out there choices for the surviving fashions might be reduce by as much as 75 p.c. The VW Group has performed a wonderful job of permitting prospects to configure their automobiles all the way down to the tiniest particulars, not simply on its luxurious fashions however on its mainstream automobiles as effectively. Sadly, these days seem like ending because the cost-cutting agenda requires a dramatically simplified listing of choices.

Sooner or later, the juggernaut desires to prioritize “merchandise and applied sciences that ship the best added worth for purchasers and the very best worth contribution to the Group.” In different phrases, it is going to concentrate on the most well-liked fashions and those who generate the very best revenue margins. The “with speedy impact” a part of the assertion we talked about earlier implies the corporate has already determined which fashions and choices will keep and which can go.

Picture by: Volkswagen

A number of Fashions Have Already Been Discontinued

In the meanwhile, we solely know that the Touareg and Touran minivan are already gone, with the T-Roc Convertible to observe them into the automotive graveyard in 2027. Elsewhere, Audi just lately bid adieu to the A1 supermini and the Q2 subcompact crossover, following the discontinuation of the TT, R8, and Q8 E-Tron in the previous few years. Porsche retired the 718 Boxster and Cayman final October and can end production of the original Macan late this month.

The VW Group can also be lowering its annual manufacturing capability to simply 9 million models. It’s a far cry from the pre-coronavirus period, when the corporate invested to spice up its complete capability to round 12 million automobiles. Because the COVID-19 pandemic, it has already reduce capability by two million models and is now seeking to get rid of one other million.

Regardless of the additional discount in annual manufacturing capability, the corporate isn’t commenting on stories of the potential closure of four plants. On the finish of June, German enterprise publication Supervisor Magazin wrote that the VW Group might shut down the Zwickau, Emden, Hanover, and Neckarsulm websites. Furthermore, the report alleged the corporate is seeking to double the variety of layoffs to 100,000. Nonetheless, the VW Group isn’t saying a phrase about any plant closures or extra layoffs past the already introduced 50,000 job cuts.

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Supply: Volkswagen

Motor1’s Take: Even with all of the stories elevating purple flags in regards to the VW Group’s dire scenario, right this moment’s announcement is lots to soak up. Gutting the lineup to this extent is virtually exceptional within the automotive business. Then once more, the product portfolio is big, spanning a plethora of fashions throughout the Volkswagen core model, Audi, SEAT, Cupra, Skoda, Porsche, Bentley, and Lamborghini. Bugatti is now not a part of the image after Porsche sold its stake in Bugatti Rimac.

Insiders declare advisors are recommending that Ducati must be put up on the market, whereas Lamborghini ought to turn into publicly traded, however the VW Group stays tight-lipped. Nonetheless, a latest firm assertion stopped short of explicitly ruling out either move, and in mild of right this moment’s announcement, plainly nearly something is feasible.