Volkswagen chief backs EU plan to strengthen Europe’s domestic industry

Volkswagen CEO Oliver Blume backed the European Union’s proposals to strengthen domestic industry. He said European carmakers should be able to compete with Chinese companies under comparable conditions.

The “Made in Europe” rules, formally known as the Industrial Accelerator Act, would restrict subsidies and public procurement to products with a substantial share of their materials and manufacturing originating within the EU.

Blume outlines pressure on carmakers

Speaking in Paris ahead of this week’s motor show, Blume cited high energy costs, weaker demand linked to inflation, the need to develop cars faster and intense competition from China as major challenges for European manufacturers.

He said Volkswagen supported open markets but that Europe also needed to defend its own interests, arguing that a strong industrial base protects technological independence. Blume added that companies selling in Europe should create jobs and value there.

Volkswagen cuts costs and models

Volkswagen is described as one of the European manufacturers most affected by the pressure and is preparing to cut as many as 100,000 jobs. Blume called the programme the largest transformation in the company’s history.

Volkswagen chief financial officer Arno Antlitz said the cuts were needed to improve profitability and defend the company’s position in its home market. The group also plans to reduce its global model range from 150 to 75, including across Audi and Škoda, to simplify production and lower vehicle costs.

On Friday, the EU said it had reached a deal with China to halve hybrid-car sales in the bloc. Volkswagen is exhibiting at the Paris motor show for the first time in 20 years and unveiled the production version of its electric ID Tiguan on Sunday.