Volkswagen slashes jobs in China amid local competition surge

China is Volkswagen's largest market, and it is increasingly buying its own products. This forces the German company to make difficult decisions.

According to Bloomberg, Volkswagen Group has begun reducing jobs in China as part of a new cost-cutting strategy. The German conglomerate aims to reduce expenses by an average of 20 percent before 2027.

According to anonymous sources, the cuts will affect several hundred local Volkswagen and Audi employees. Company representatives did not share details. In a statement sent to Bloomberg, we read only about the optimization efforts that "may also include direct and indirect personnel costs."

In the first half of 2024, Volkswagen's sales in China decreased by 7.4 percent, mainly due to increasing competition from local companies. The German brand had consistently led the Chinese market for over 15 years. However, in 2023, it was surpassed by BYD.

Last week, Bloomberg also reported on the possible closure of one of VW SAIC's Chinese factories due to weakening demand. Final decisions have not yet been made. However, it is becoming increasingly clear that Europe will not be Volkswagen's only concern.