Blume holds up China as template, “clear progress” on VW cuts 

Volkswagen Chief Executive Oliver Blume said in an interview with Bild am Sonntag, published 21 March, that Germany can “certainly learn a thing or two” from China’s approach to industrial planning, citing the country’s five-year plans, stable priorities, and “high degree of discipline” in execution. Blume also confirmed that the group’s restructuring programme—which includes cutting 50,000 jobs across German operations by 2030—is making “clear progress”, but noted that some areas like energy costs and regulatory burden are outside of its control. 

“The Chinese take a very structured, planned approach with their so-called five-year plans and set clear priorities within them,” Blume said. “It is optimally organised.” The remarks are notable not only for their subject matter but for their context: Volkswagen has been steadily losing ground in China to the country’s scores of domestic automakers. This is one of the primary reasons it now finds itself restructuring the business models that made it one of the world’s biggest automakers. Blume, then, is not observing Chinese industrial discipline from a comfortable distance.

On the point of restructuring, Blume conceded that the automaker’s old formula—developing and producing vehicles in Germany for global export—”no longer works”, and that the group is now tailoring products far more locally to each region. While this is in part due to regional market references, it is also a matter of cost: a €40,000 vehicle made by Volkswagen generates a profit margin of just 2.8% due to the cost of parts, labour and development costs in Germany. Among the global cohort, Japanese OEMs tend to fare best; for example, Suzuki’s margins sit at around 12.53%.

Although phrased rather mildly, Blume’s comments on China carry a political edge that the executive may or may not have fully intended. Praising a one-party state’s ability to conduct central planning and see industrial strategies through to their conclusion, while simultaneously appealing for government action and regulation, functions as a sideways criticism of German—and EU—political culture. The approach of slow consensus-building has served Western automakers adequately for decades, but appears ill-suited during a period of intense and persistent disruption. 

Volkswagen has navigated sustained reputational scrutiny over its Chinese operations, including questions about supply chains and operations in Xinjiang; it eventually sold its plant in the Western province to state-owned SAIC in 2024. Like many global players it is now tacking towards a “made in China, for China” strategy, developing vehicles locally that are adapted to the particular needs of the local market. The ID.Unyx 08, its first model made in partnership with local player Xpeng, entered series production in March 2026.

Volkswagen’s operating profit fell sharply in 2025, although Blume attributed this in part to one-off factors including US tariff impacts running to several billion euros and costly problems with EV battery systems. He declined to rule out further plant closures—a stipulation the automaker’s works council fought hard to achieve—saying capacities would “always be subject to scrutiny” whether in Germany, China or elsewhere. He also claimed to be unaware of a McKinsey scenario reportedly modelling a reduction to just two remaining German plants, although he did not challenge its premises.

The group closed its Transparent Factory in Dresden in December 2025, the first German plant closure in Volkswagen’s history. The site had faced diminishing volumes for years, described by German media as “marginal” in November 2025. It remains open as a visitor’s centre.