Volkswagen Group is planning to simplify its product portfolio and reduce overlaps among its brands to cut costs and enhance operational efficiency amid increasing competition.
In an interview with Germany's Auto Motor und Sport magazine, Volkswagen Group CEO Oliver Blume stated that the group needs to reduce the complexity of its current product portfolio. Volkswagen currently owns numerous automotive brands, spanning from mass-market to luxury, including Volkswagen, Audi, Skoda, Seat, Cupra, Porsche, Bentley, and Lamborghini. While these brands have often shared platforms, engines, and technology for many years, many models have also emerged with similar market positioning.
According to Blume, each brand needs a clear identity and its own role within the group. Volkswagen wants to redefine the position of each brand to reduce complexity in the product portfolio.
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The Volkswagen T-Roc Cabriolet, one of the Volkswagen Group's best-selling models. Photo: Motor1 |
The Volkswagen T-Roc Cabriolet, one of the Volkswagen Group's best-selling models. Photo: Motor1
Beyond streamlining its product portfolio, Volkswagen also aims to reduce the number of chassis platforms and electronic architectures currently in use across the group. The company believes that standardizing technical components will help cut costs, reduce complexity, and shorten new product development time. Volkswagen is also reviewing excess capacity at some factories. This means the designed production capacity of some manufacturing facilities no longer aligns with actual market demand, particularly as the global automotive industry enters a phase of fiercer competition.
This move comes as European car manufacturers face significant pressure from the rise of Chinese manufacturers, especially in the electric vehicle segment. Additionally, the increasing costs of software development, battery technology, and stricter emission regulations are forcing companies to find ways to improve investment efficiency.
In 2025, Volkswagen sold approximately 9 million vehicles globally, maintaining its position as the world's second-largest automotive group after Toyota. However, the gap with Toyota remains significant, and the profit margins of many Volkswagen brands have been under pressure in recent years. Streamlining the product portfolio is considered part of Volkswagen's long-term strategy to reduce operating costs, increase competitiveness, and improve profitability during the transition to electric vehicles.
Volkswagen's direction is somewhat similar to what Toyota is doing. Previously, Toyota CEO Kenta Kon believed the company had created too many variants of the same product, leading to increased development and production costs. According to him, some models or versions might be eliminated during the restructuring process to build a more streamlined and efficient product portfolio. This indicates that major automakers are increasingly focusing on profitability rather than just expanding the number of products and versions.
By Ho Tan (Source: Motor1)
