The brand has rebuked speculation of its facility in South Africa closing soon as it celebrates of 75 years in the local market this year.
Volkswagen’s Zwickau plant in eastern Germany. Photo by AFP
Volkswagen is considering cutting tens of thousands more jobs worldwide and shuttering up to four plants in Germany, according to weekend reports from Germany.
50 000 jobs in the firing line
Volkswagen is already planning to cut 50 000 jobs across its brands in Germany by 2030 as it is struggling with high costs, US tariffs and fierce Chinese competition in electric vehicles.
A Volkswagen spokesman said that he could not comment on confidential matters but added that the company needed to become more competitive.
“The board has repeatedly emphasised that our current business model no longer works for all our brands in its current form,” he said.
“The entire group must significantly improve its competitiveness. This requires a sharper focus and even more rigorous cost and investment discipline.”
Reduced investment
Citing unidentified company sources, Manager Magazin said the carmaker would cut investment by 15% over the next five years.
Volkswagen would also close plants at Hanover, Zwickau and Emden after production runs of models currently made there end. A plant at its sister brand Audi would also close, the magazine added.
Christiane Benner, head of the IG Metall union, said in a joint statement with Volkswagen’s works council chief Daniela Cavallo that employees would fight the cuts if they came.
“If these plans come to fruition we would stop them with all our might. The board should get on with its job and focus on its core work: competitive products.”
Under agreements with unions, compulsory layoffs are supposed to be ruled out at Volkswagen until 2030 and at Audi until 2033.
Volkswagen plant closures in Germany are also supposed to be off the table until at least the end of the decade under an agreement reached at the end of 2024.
The group is under intense pressure after years of declining sales in China and slimmer profit margins from electric cars, even before US President Donald Trump raised tariffs last year.
…and South Africa?
Not mentioned are ongoing lingering reports of the brand’s Kariega plant, formerly Uitenhage, closing over a lack of its calls industry evolving related to the acceptance of new energy vehicles.
Speaking at its annual product Indaba in February, Volkswagen Group Africa boss Martina Biene, said 2026 rates as a “make or break” year for the local automotive industry.
Despite admitting to have had “valuable interactions” with Trade and Industry Minister Parks Tau last year, Biene said nothing has been heard from government since then.
In addition, a letter addressed to President Cyril Ramaphosa before the festive season also went unanswered.
“This is a make-or-break year for the industry. I wrote a letter to the president prior to Christmas in which I urged government to make the crucial decisions that are needed for business,” Biene said.
“We’ve had valuable interactions with Parks Tau [minister of trade and industry] last year. There was a good understanding, and they took lots of notes, but nothing happened. That is why I wrote to the president, but the unfortunate thing is that he didn’t reply to me.”
Back in 2022, former Volkswagen Passenger Car brand, Thomas Schäfer, warned that justifying a business case for South Africa had become difficult and that looking back on past accomplishments no longer mattered.
“Each region must carry their weight and perform. And South Africa has always been a joy. But moving forward, what is the plan? There has to be one. Volkswagen South Africa has always been a cornerstone of Nelson Mandela Bay and that has to continue,” Schäfer said.
“We are not just here to do business. We are apart of the community. We want to see the team here strengthening and my guess is, you will see an incredible acceleration from the second half of this decade.”
Schäfer, who headed Volkswagen South Africa between 2015 and 2020, concluded by saying, “there is no way back. It is a myth that [current matters] in South Africa will stay as is. Change will have to happen”.
In a subsequent interview with Reuters 12 months later, Schäfer said, “eventually you have to say, why are we building cars in a less competitive factory somewhere far away from the real market where the consumption is? I’m very worried about it. We’re not in the business of charity”.
Volkswagen has since hit out at claims of its departure after a series of speculative reports and what it described as the wrongful interpretation of Biene’s wording at the Indaba by certain media outlets.
The brand, which celebrates 75 years of being in South Africa this year, will start production of the Tengo, known as the Tera in Brazil, before the end of this year in readiness for the start of sales in 2027.
Additional reporting by Charl Bosch
