Freedom: Volkswagen restructuring supports the company’s shares

Volkswagen (VOW3), one of the world’s largest automakers, has approved a large-scale restructuring plan that предусматривает cutting about 50,000 jobs and nearly halving its model range by 2035. These measures could support the company’s financial performance by reducing costs and improving operating efficiency, believes Freedom Finance Global analyst Vladimir Chernov.

Volkswagen Group is a German automotive концерн and one of the world’s largest automakers. The group includes the Volkswagen, Audi, Porsche, Skoda, SEAT brands and other automotive brands. In the first half of 2026 the group’s net profit fell by about 30% amid, among other factors, weaker sales in China.

Why investors viewed Volkswagen’s plan positively

Volkswagen’s Supervisory Board approved the large-scale Future Plan 2030 restructuring plan. It предусматривает cutting an additional около 50,000 jobs, including management positions, optimizing production capacity, and reducing the model range by about 50% by 2035. The company also intends to cut the complexity of its product offering by about 75%.

After the decision was announced Volkswagen shares on the U.S. OTC market rose 8.7%, posting the strongest performance since March 2023.

In Vladimir Chernov’s view, this market reaction reflects investors’ positive attitude toward Volkswagen’s decisive steps to reduce costs and improve operating efficiency. The company is facing growing competition from Chinese manufacturers while simultaneously bearing high expenses related to the auto industry’s shift to electric транспорт.

One of the key problems remains plant utilization. Volkswagen estimates excess production capacity in Europe at more than 500,000 vehicles per year. The company is not yet able to ensure competitive utilization of its plants in Emden, Zwickau, Hanover, and Neckarsulm after production of current models ends in 2031–2034. Alternative uses are being considered for these facilities.

Volkswagen targets a 9% margin by 2030

The restructuring should help Volkswagen significantly improve business profitability. The automaker has set a goal of bringing operating margin to 9% by 2030, versus 3.8% in the first half of 2026. The company is targeting annual sales of about 9 million vehicles.

Reducing the model range will increase production volumes of individual models and lower fixed costs. Volkswagen also intends to simplify its management structure and speed up decision-making.

Halving the model range by 2035 and optimizing production capacity, Chernov estimates, should help the company cope with intensifying competition from Chinese manufacturers and the high costs of the transition to electric vehicles.

At the same time, the company will continue large investments in business development. For capital expenditures and research and development in 2027–2031, Volkswagen plans to allocate €135 billion.

What risks remain for Volkswagen shares

Despite the market’s positive reaction, implementation of the program remains the main uncertainty factor. One risk Chernov cites is the stance of unions and employee representatives. They acknowledge the need to cut costs but oppose plant closures and demand that the main burden of the restructuring not fall on employees.

Another risk is related to Volkswagen’s financial metrics and credit rating. Earlier, one of Germany’s largest asset managers, Union Investment warned of a risk to Volkswagen’s credit rating if the group fails to materially improve its financial position.

Chernov estimates that approval of the restructuring creates a short-term positive impetus for Volkswagen shares. However, the long-term performance of the stock will depend on how successfully the company implements the stated measures, cuts costs, and moves toward the target operating margin of 9% by 2030.

Not an individual investment recommendation.