BERLIN, Feb 16 (Reuters) - Volkswagen plans to cut costs by 20% across all brands by the end of 2028, Manager Magazin reported on Monday, as the German automaker looks to shore up its finances to counter the impact of higher costs, a tough Chinese market and U.S. tariffs.
CEO Oliver Blume and finance chief Arno Antlitz presented a "massive" savings plan at a closed-door meeting with the company's top executives in Berlin in mid-January, the business publication added.
A company spokesperson said Volkswagen
launched a programme across all brands and entities three years ago and has since achieved savings in the double-digit billion-euro range.
The programme has enabled the group to offset geopolitical headwinds such as U.S. tariffs, the spokesperson said.
Where exactly the savings are to be made and where cooperation between the brands is to be improved remained unclear at the meeting, Manager Magazin said, but plant closures could also be on the table.
Volkswagen's work council chief, Daniela Cavallo, acknowledged the report but pointed to a deal with Volkswagen AG struck at the end of 2024, in which measures for competitiveness and for a socially acceptable impact on the workforce had been agreed upon.
"With this agreement, we have expressly ruled out plant closures and layoffs for operational reasons," Cavallo said in a statement.
35,000 JOBS CUT BY 2035
Europe's largest carmaker is in the process of cutting 35,000 jobs in Germany by 2030. Its core brand announced in January that it planned to reduce management positions and consolidate its production platform, aiming to save 1 billion euros ($1.2 billion) over the same period.
The Volkswagen spokesperson added that Blume will provide an update at the company's annual results press conference on March 10.
German carmakers face challenges in China as they have to compete in a spiralling price war with local rivals.
MERCEDES PROMISES "RELENTLESS COST DISCIPLINE"
Last week, Mercedes-Benz said profit margin at its autos division could fall further this year, adding that it would apply a "relentless cost discipline".
Manager Magazin reported Volkswagen's expenditures on software and the dual development of combustion engines and electric drives remained high, citing a source present at the meeting.
The Wolfsburg-based company said on Friday it remained committed to its course towards more efficient and low-emission vehicles in the long term.
($1 = 0.8430 euros)
(Reporting by Linda Pasquini and Ilona Wissenbach, editing by Kirsti Knolle, Thomas Seythal and Anil D'Silva)
