The Volkswagen Group will cut its vehicle line-ups by 50% and slash equipment options by 75% under a radical new restructuring plan designed to lower production overheads and optimise supplier efficiency.

Volkswagen Group said it would cut vehicle line-ups and fundamentally realign its business model

The sweeping 2030 strategic package was revealed in details outlined by the Volkswagen Group Executive Board to the Supervisory Board and spanning 12 initiatives and a new 2030 target framework.

The streamlined model line-up and reduced offering complexity are central components of the new strategy.

By slashing product complexity, the company intends to improve the cost structure of its vehicles “without compromising product substance” while “significantly reducing overhead costs, increasing the efficiency of our plants, and accelerating technology development and decision-making”.

VW also said it would “harmonise” key technology fields of platforms, electronic architectures and software landscapes to meet the requirements of the western and eastern hemispheres respectively.

The group is also cutting its global manufacturing footprint. The company is adjusting its cross-brand technical capacity to target a production level of approximately nine million units per year. This represents a significant drop from the pre-pandemic infrastructure, which was scaled to build roughly 12 million vehicles annually.

To maintain financial flexibility during this aggressive transition, Volkswagen is tightening the focus on its core automotive operations and divesting of non-strategic assets. The company announced it secured a cash inflow of approximately €7.4bn (£6.3bn) at the end of June by selling its majority stake in German engineering and manufacturing business Everllence.

CEO Oliver Blume said the overarching goal of the 2030 target picture was to make the group faster, more resilient and more competitive “through less complexity, focused technologies, an even stronger alignment of products, development and production with regional markets, the reduction of overcapacities, a streamlined equity portfolio and significantly leaner structures”.

Blume maintained that the new, leaner framework would create “the conditions for sustained success – even in an increasingly demanding environment”.

The aggressive downsizing marks the next phase of the group’s corporate transformation. Over the last several years, “external financial headwinds in the double-digit billions” have forced the company to implement cross-brand performance programmes.

Arno Antlitz, CFO of Volkswagen Group, said: “Despite the progress achieved, the cost reductions planned to date under the agreed programmes are not sufficient in the current economic and geopolitical environment. We must instead fundamentally realign our business model and achieve structural, sustainable improvements.”