Drastic Austerity Measures: VW CEO Schäfer Aims to Halve Model Range by 2035 – Major Restructuring with Skoda and Cupra

VW CEO Schäfer is pushing for a radical austerity program: the model range is to be halved by 2035. By pooling resources at VW, Skoda, and Cupra, synergies are intended to increase profitability. The goal is to reduce complexity in order to secure investments in electromobility.

Drastic Austerity Measures: VW Boss Schäfer Aims to Halve Model Range by 2035 – Major Restructuring with Skoda and Cupra

Wolfsburg – The Volkswagen Group is facing a radical realignment of its portfolio. As Brand CEO Thomas Schäfer announced, the car manufacturer plans to reduce its model range by half by the year 2035. This drastic step is part of a comprehensive austerity program that includes not only the core VW brand but also the subsidiaries Skoda and Cupra. The goal of this strategy is to significantly increase profitability by bundling resources more effectively and utilizing cross-brand synergies, while preparing the Group for the challenges of electromobility and growing global competitive pressure.

The background to this decision is the ongoing cost pressure in the automotive industry, intensified by high investments in software development and battery technology. VW is thus responding to a market situation in which niche models are becoming increasingly uneconomical. By eliminating low-profit variants and focusing on high-volume platforms, production complexity is to be massively reduced. Cooperation between the Group's volume brands – VW, Skoda, Seat/Cupra, and Volkswagen Commercial Vehicles – will be intensified. Concretely, this means that future vehicle generations will be based even more heavily on identical technical architectures, while differentiation will occur primarily through design and the software-based user experience.

Efficiency Increase through Strategic Management

This restructuring is a prime example of transformative change management in a globally active major corporation. For observers and students in the field of Business Administration, Thomas Schäfer's strategy illustrates the necessity of radically questioning traditional business models in times of technological change. It is no longer just about growth through diversity, but about operational excellence and the optimization of the value chain. In MBA curricula, this form of portfolio streamlining is often discussed as a necessary instrument for securing long-term competitiveness, especially when established industries come under pressure from new market participants and disruptive technologies.

The Significance for Executives and MBA Graduates