Volkswagen is no longer facing a simple internal restructuring. The German group is considering a downsizing plan that could affect up to 100,000 jobs worldwide and lead to the closure of four plants in Germany—Hanover, Zwickau, Emden, and Neckarsulm (the latter associated with Audi) after previously reaching an agreement with unions to eliminate 50,000 jobs by 2030.
The figure places Germany’s largest industrial company in the midst of its most severe labour crisis in decades.
The problem is not only Volkswagen. BMW has set aside up to €1 billion for restructuring costs, a figure analysts translate into as many as 10,000 fewer jobs and a 15% reduction in its European production. Mercedes-Benz, hit by falling margins, has already recorded around 5,500 voluntary departures in Germany and is pushing to cut internal costs, focusing on bonuses and working conditions.
The heart of the adjustment is in Germany, but the impact is European. The German automotive industry still supports around 700,000 direct jobs, although employment figures have fallen to their lowest levels since 2011.
For years, the model worked on a clear formula: high-margin combustion engines, massive exports, and China as a profit machine. That era is over—because the student has surpassed the teacher.
China no longer simply buys German cars. It builds them, improves them, and exports them. Brands such as BYD, Chery, SAIC, Leapmotor, and Xiaomi have gained market share in Europe with cheaper, well-equipped electric and hybrid vehicles, backed by a decisive industrial advantage: control over batteries, critical materials, scale, and state support.
In China, the market share of foreign manufacturers fell from around 57% in 2020 to 32% in 2025. Volkswagen lost its dominant position to BYD, while Porsche reduced its exports to the country from almost 100,000 units in 2021 to around 40,000 in 2025.
That is the transmission chain of the problem: lower profits in China, price pressure in Europe, tariffs and frictions in the United States, high energy costs in Germany, and an electric transition that requires massive investment precisely when margins are falling.
But one thing must be made absolutely clear: the perfect storm did not fall from the sky. It was built over years by complacent corporate decisions and by a European policy that accelerated electrification without first securing technological sovereignty, domestic batteries, or competitive energy. Almost all experts agree that it has been a suicide that everyone had warned about.
Volkswagen is the most extreme case, but it is not the only one. Bosch is preparing around 18,500 cuts. Schaeffler and Aumovio are also eliminating jobs and closing sites. This confirms that the crisis affects not only the visible brands but the entire supply chain: components, engineering, electronics, software, logistics, and subcontractors. When the manufacturer falls, the ecosystem falls with it.
France is seeing the same problem with Renault and Stellantis. Renault is losing ground against China’s advance in electric vehicles, while Stellantis—Peugeot, Citroën, Opel, Fiat—is carrying excess capacity in several European plants.
Italy is exposed through Fiat and Stellantis production sites. Spain, although more cost-competitive than Germany, depends on decisions made elsewhere: its Stellantis, Volkswagen, and Ford factories are production platforms, not sovereign decision-making centres. In a scenario of excess capacity, that difference matters.
Ford shows another dimension of the retreat. Its Cologne plant will move to a single shift in 2026, with associated job cuts. This is not an isolated case but part of a European market that remains 16% below pre-pandemic levels. Chinese competition is not arriving in an expanding continent but in a weak, regulated, and expensive market.
The situation is so dire that even Volkswagen has floated the possibility of Chinese partners producing cars in underused European plants. In other words, Europe could end up leasing its surplus industrial capacity to the very competitors that have triggered the restructuring.
Volkswagen’s crisis is not only German nor only automotive. It is a warning about the price of losing a strategic industry while boasting about European autonomy. The question now is not how many jobs will be cut, but who will control the factories, the technology, and the value chain once the shock is over.
Strategic autonomy? More like absolute dependency manufactured in the offices of Brussels.
