Historical crisis: Volkswagen intends to close 4 major plants and cut 40,000 employees

Volkswagen, a symbol of the global automotive industry and Europe's largest auto concern, is facing the deepest systemic crisis in its history. According to a confidential strategic document obtained by the influential German publication WirtschaftsWoche, the auto giant's leadership has taken an unexpected and drastic step: the company has unanimously approved a plan to completely close four major car plants in Germany itself and relocate a number of models to neighboring countries.

Secret plan exposed: Which giant plants will be closed?

The confidential report prepared for the Volkswagen supervisory board meeting scheduled for September 3–4 came as an unprecedented blow to the German auto industry. According to the plan, the timeline for the suspension of enterprises is set as follows:

• 2031: Assembly lines in the cities of Emden and Zwickau will be completely stopped;

• 2032: The large production complex in Hanover will conclude its operations;

• 2034: The car plant in Neckarsulm will be closed.

According to estimates, nearly 40,000 workers and employees labor at these four enterprises slated for suspension. Furthermore, in accordance with CEO Oliver Blume's "Zielbild 2030" transformation plan, about 100,000 jobs (15 percent of the workforce) are expected to be cut across the concern worldwide.

Production to be relocated to Eastern Europe

The concern's confidential statement assesses the situation bluntly: "Current business models and structures can no longer ensure the long-term competitiveness and profitability of the Volkswagen Group."

Due to energy resources, high taxes, and expensive labor, manufacturing cars on assembly lines in Germany has ceased to be justified. For this reason, the production of certain models at the German plants will be relocated to neighboring countries with relatively cheaper and lower costs — the Czech Republic, Slovakia, and Poland. No new plants will be built in Germany itself.

The China blow: The collapse of German brands in the East

One of the main reasons for the crisis facing Volkswagen is the rapid loss of the Chinese market, which was its largest source of revenue. The takeover of the market by local electric vehicles and technology companies is pushing European brands aside.

According to the results of the second quarter of 2026:

• Volkswagen suffered the greatest losses: sales volume in the Chinese market suddenly crashed by 36.6 percent, dropping to 424,300 vehicles;

• BMW and Mini recorded a sharp drop in sales by 30 percent;

• Mercedes-Benz also faced an excessively weak demand in the Asian market.

Industry analysts note that this problem is not explained by a general economic crisis, but by the unprecedented strengthening of the Chinese auto industry, which is outcompeting German quality and brands.

The German auto giant, once at the peak of world mechanical engineering, is now fighting for survival at home by closing plants and drastically cutting costs.

In your opinion, will Volkswagen, known for its traditional quality, be able to overcome its crisis, or will Chinese brands take complete control of the global car market in the coming years? Leave your thoughts and predictions in the comments!