VW cuts 2030 China sales target, executive tells Handelsblatt

VW cuts China sales targets and margins, executive tells Handelsblatt

Volkswagen Revises Strategy Amid Intensifying Competition in China

FRANKFURT, April 23 (Reuters) - Volkswagen has sharply lowered its ambitions for China, cutting long-term sales and profitability targets as competition intensifies, a leading executive told the Handelsblatt newspaper in an interview published on Thursday.

Reduced Sales and Profitability Targets

Volkswagen's top executive in China, Ralf Brandstaetter, said the carmaker now expects to sell up to 3.2 million vehicles annually in China by 2030, down from a previous target of as many as four million.

The downgrade also reflects slower structural growth in the world's largest car market, he added.

Volkswagen now targets operating margins of 4%-6% in China by 2030, down from double‑digit margins the group once generated there, Brandstaetter was quoted as saying.

Capacity and Workforce Reductions

The strategic shift is accompanied by a substantial reduction in capacity. Since 2023, Volkswagen has cut around 1.5 million units of production capacity in China, according to the report.

Plant Closures and Repurposing

Five vehicle and engine plants have been sold, closed or repurposed, including sites in Nanjing and Urumqi, while one of the group's oldest factories in Anting has been scaled back.

Staffing Adjustments

Staffing levels have been reduced accordingly, Brandstaetter said. Volkswagen has cut its workforce in China from about 90,000 to 70,000 employees.

Repositioning in the Chinese Market

Volkswagen is trying to reposition itself in China as a maker of more localized, China-specific electric vehicles.

EV Offensive and New Model Launches

On Tuesday, Volkswagen presented four world premieres across its VW, Jetta and Audi brands, as part of an EV offensive to regain lost ground in the world's largest car market.

(Reporting by Ludwig Burger, Editing by Linda Pasquini and Ludwig Burger)