Volkswagen is urging European policymakers to strengthen conditions for domestic manufacturing as the German automaker undertakes one of the largest restructurings in its history and confronts increasing competition from Chinese electric-vehicle manufacturers.
Chief Executive Oliver Blume said Volkswagen is working to reduce complexity across the company while European policymakers must establish conditions that allow manufacturers to remain competitive.
The appeal comes as European automakers face growing pressure from lower-cost Chinese competitors expanding across the region.
Volkswagen is simultaneously cutting costs and preparing additional electric vehicles across brands including Volkswagen, Cupra and Skoda.
Blume has backed proposed “Made in Europe” measures designed to encourage regional manufacturing as policymakers attempt to preserve industrial capacity while maintaining the transition toward electric vehicles.
The challenge is particularly difficult for established European manufacturers.
They must finance expensive EV development while protecting margins, factories and employment against competitors emerging from China’s intensely competitive automobile market.
For investors, Volkswagen’s restructuring will test whether Europe’s largest automakers can close the cost and technology gap without becoming increasingly dependent on government protection.
The next signals will come from European industrial-policy decisions, Volkswagen’s cost reductions and market-share trends as Chinese manufacturers continue expanding.
