German auto giant Volkswagen has significantly scaled back its China ambitions, slashing sales and profitability targets for 2030 due to intense competition.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.
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 per cent-6 per cent in China by 2030, down from double-digit margins the group once generated there, Brandstaetter was quoted as saying.
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.
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 levels have been reduced accordingly, Brandstaetter said. Volkswagen has cut its workforce in China from about 90,000 to 70,000 employees.
Volkswagen is trying to reposition itself in China as a maker of more localized, China-specific electric vehicles.
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.
