Discussions surrounding Volkswagen’s ongoing cost-reduction program are intensifying. During recent presentations given to the supervisory board and top VW management, CEO Oliver Blume highlighted four specific German plants-including VW’s electric car works in Emden and Zwickau, the commercial vehicle plant in Hanover, and Audi’s facility in Neckarsulm-as excessively costly.
However, according to reports from “Der Spiegel”, the stated cost concern seems misguided, as these supposedly costlier plants are actually considered relatively affordable. Sources suggest that the VW board may be attempting to exert pressure on employees by threatening store closures. In fact, the VW plants are reportedly cheaper than facilities belonging to the VW subsidiary Porsche.
Concrete financial data cited in the German press illustrates this disparity. For instance, the projected factory costs for Zwickau are expected to be under 4,500 euros in 2025, while Emden is estimated at around 1,000 euros more. This pales in comparison to Porsche’s plant in Leipzig, which is valued at over 6,500 euros, or Audi’s site in Neckarsulm, priced at nearly 6,200 euros. Porsche’s facility in Zuffenhausen, where the 911 and Taycan are built, is reported to exceed 13,000 euros.
Experts suggest that the issue these plants face is not primarily financial, but rather a “underutilization problem”. Internally, VW plans to manufacture at these four sites only until the first half of the 2030s. While VW cannot lay off workers due to operational necessity until 2030, and this guarantee extends until 2033 for Audi, the corporation could potentially transfer models currently produced in Germany to cheaper group-owned works in Southern or Eastern Europe after that time.
VW aims to reduce its European production capacity by up to 500,000 vehicles annually-a reduction roughly equivalent to two entire plants. However, Blume emphasized that shutting down a facility remains “the worst and most expensive option” for trimming overcapacity, suggesting alternative strategies such as partnerships with the defense industry or Chinese automakers.
Amid these strategies, Phoenix Porsche has been largely excluded, according to internal sources. While it is acknowledged that the high factory costs are justified by the luxury nature of the product-such as the Porsche 911, which undergoes extensive customization for wealthy clients and commands prices often exceeding 100,000 euros-audi and Porsche currently do not co-locate production at any German site, despite using similar underlying technical platforms. Furthermore, cost-cutting measures similar to the suspension of breaks, which VW has used elsewhere, have yet to be applied to the premium brands.