Volkswagen German Shareholder Urges Local Production of China-Developed Models to Safeguard Jobs

Recently, Olaf Lies, Minister of economy of Germany's Lower Saxony state and member of Volkswagen Group's Supervisory Board, publicly urged shifting production of models currently developed and built in China to domestic German facilities — to stabilize plant operations and safeguard jobs. His statement directly addresses the severe operational pressures facing Volkswagen Group: multiple reports indicate the company is evaluating the closure of four plants in Germany, potentially affecting up to 100,000 jobs.

In a recent interview with German media, Weil stated: "If we produce in Germany the models currently built in China, we can stabilize factory capacity utilization — and open new R&D and innovation opportunities for our domestic sites." He stressed the core objective is to "secure factory employment and revitalize existing capacity," not to allow further offshoring or build new factories abroad. "Watching capacity shift overseas without action is not sustainable."

Notably, this is not Weil's first such proposal. As head of the federal state where Volkswagen is headquartered, Lower Saxony holds a 20% voting stake in Volkswagen Group and wields decisive influence over major corporate decisions. The state hosts five of Volkswagen's six major vehicle assembly plants in western Germany — giving its stance substantial weight.

Currently, Volkswagen Group faces triple pressure: accelerating overseas expansion by Chinese NEV makers eroding market share; U.S. import tariffs raising costs; and persistently weak automotive demand across Europe. Volkswagen has acknowledged its current business model is "no longer viable." In this context, restructuring global production capacity has become a strategic priority.

This logic is further reinforced by internal group actions. Luxury subsidiary Porsche is reportedly planning to relocate its Cayenne production line from Slovakia back to its Leipzig plant in Germany — aiming to boost domestic capacity utilization, closely aligning with Weil's advocated principle of "local production and activation of existing assets."