Volkswagen seeks EU policy support for restructuring as Chinese EV competition intensifies

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Volkswagen seeks EU policy support

Highlights

Volkswagen CEO Oliver Blume urges EU policymakers to support the group's restructuring, calling it the company's largest transformation, with potential German plant closures and major job cuts.
Competition intensifies as Chinese automakers like BYD and Leapmotor expand in Europe, with Volkswagen set to reveal new affordable EVs, including the ID. Tiguan electric SUV.
Blume endorses EU-China deals limiting plug-in hybrid imports and local content rules, warning that a potential Chinese-led EV price war could erode European car market profitability.

Restructuring push and policy demands

As reported by Reuters, Volkswagen Chief Executive Oliver Blume says European policymakers need to create the conditions that help the group's restructuring succeed, describing the overhaul as a shared responsibility between industry and government.

Speaking at a "For Europe" event ahead of the Paris motor show, Blume says Volkswagen is working to reduce complexity across a portfolio that spans the mass-market VW brand as well as Porsche and Lamborghini. He calls it the biggest transformation programme in the company's history.

Blume says companies must become more competitive and create attractive opportunities, while policymakers must set the right framework conditions. The comments come as Volkswagen tries to carry out sweeping job cuts and warns it could close up to four plants in Germany.

Investors are also pressing Blume to show that the turnaround plan extends beyond cost reduction and includes progress in product development and software.

European market pressure from Chinese rivals

The Paris show comes at a critical moment for Volkswagen as it races to refresh its mass-market EV line-up while Chinese automakers expand rapidly in Europe. A new range of affordable electric models from VW, Cupra and Skoda is due to be shown, alongside the premiere of the ID. Tiguan electric SUV.

Volkswagen remains Europe's top-selling automaker, holding roughly a quarter of the market over the past decade, but competition is rising as brands such as BYD and Leapmotor gain traction. Chinese carmakers, hit by an EV price war and weaker sales at home, are pushing harder into Europe.

Blume is among German auto executives calling for a more protectionist EU stance. On Friday, he says a deal between the EU and China that could cut Chinese imports of plug-in hybrid vehicles into the bloc by more than half is an important step toward levelling the playing field, and he has also backed local content rules to encourage manufacturing in Europe.

Gregor Williams, an analyst at Rhodium Group, says the industry has become much more concerned about the competitive challenge from China. He says weakness in China's domestic auto market is creating export pressure and warns that if China's price war spreads to Europe, the region's car market could become far less profitable.

Our previous coverage of the EU’s widening trade gap with China explained how the bloc’s roughly €1 billion-a-day goods deficit is fuelling calls in Brussels for tougher trade defences, particularly in concentrated import categories such as machinery and cars. It also argued that beyond tariffs, Europe’s longer-term answer hinges on competitiveness reforms—deeper capital markets, fewer single-market barriers, stronger energy policy and retraining—many of which remain only partially implemented.

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