Volkswagen Faces Critical 2-Year Turnaround Period Amidst Fierce Competition and Union Tensions

Volkswagen has up to two years to turn around its main car brand, facing potential plant closures in Germany. CFO Arno Antlitz highlighted issues of cost inefficiencies, increased competition in Europe, and a significant drop in vehicle sales post-COVID, all while under pressure from powerful unions.

Volkswagen's chief financial officer Arno Antlitz has issued a stern warning: the automaker has one to two years to overhaul its primary car brand or face dire consequences. Speaking at the company's Wolfsburg headquarters, Antlitz pointed to potential plant closures in Germany as the company grapples with financial inefficiencies and mounting competition.

The automotive giant has been spending beyond its earnings for some time, according to Antlitz. This financial imbalance, he said, cannot persist if Volkswagen hopes to succeed in the ongoing transformation of the market. A key concern is the intensified competition in Europe, with the market shortfall of 2 million vehicles post-COVID.

Volkswagen holds a sizable 25% market share in Europe, yet the lack of semiconductor supplies has further strained production. Productivity improvements and cost reductions at German sites are imperative, Antlitz stressed, noting that leveraging group synergies could help the company regain its footing.

(With inputs from agencies.)