Volkswagen pushing ahead with German cost-cutting, brand boss says

BERLIN, Dec 18 (Reuters) - Volkswagen ⁠is making ⁠progress ‍with its cost-cutting drive, the head of the German carmaker's core brands said in a media ‍interview on Thursday, pointing to headcount reductions and ​savings at the group's plants in Germany.

The company has reduced costs ​at its factories in Wolfsburg, Emden and Zwickau by 30% on average, brand CEO Thomas Schaefer told the Auto Motor Sport industry magazine.

On ​top of this, some 25,000 workers have signed partial retirement or severance agreements, he added.

"We still have ​a way to go, but together we want to prove that it is ‌possible to develop and build competitive cars in Germany," Schaefer said.

In December 2024, Volkswagen struck an ​agreement with unions to drastically restructure ⁠its German operations, including 35,000 jobs cuts by 2030, as it faces off with cheaper ‌Chinese rivals and navigates a slower-than-expected shift to electric.

On Tuesday, the European Commission dropped its hard cut-off for new combustion-engine ‌cars from 2035, bowing to calls from Volkswagen and other carmakers for ‌greater flexibility.

Schaefer ruled out offering combustion engines in the core brands' new small-car family, whose first model - the ID.Polo - is to be ‍launched next year at a starting price of around 25,000 euros ($29,307.50).

This wouldn't make sense due ⁠to emissions regulations and would be too expensive for consumers, according to the executive.

"The future in this segment is electric," he said.

($1 = 0.8530 euros)

(Reporting by Rachel More and Christina Amann, Editing by Madeline Chambers)

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