Volkswagen targets faster development and technological leadership

Volkswagen Group plans to spend more on each new model, accelerating development and targeting “technological leadership” across its product ranges as it brings fresh models to showrooms at a faster pace.

The increased per-model spending will come as Volkswagen Group looks to slash its range from around 150 models to approximately 75, while also reducing the number of variants within individual lineups.

The strategy is now understood to target lower overall spending while allowing Volkswagen to invest more heavily in each remaining model.

The approach was reported by Automotive News as part of an internal document named Future Picture 2030, which outlined the approach alongside previously announced job cuts and plant closures.

“Volkswagen Group is one of the world’s most innovative automakers, but it also invests more than all of its competitors,” Volkswagen Group chief financial officer Arno Antlitz said in the document.

“We are aligning development even more consistently with customer value … Less complexity in platforms and modules, greater use of artificial intelligence [AI] throughout the development process, and faster processes will help us put more innovation on the road with fewer resources," added Volkswagen Group development chief Werner Tietz.

The measures are intended to keep Volkswagen Group, which includes Audi, Skoda, Cupra, Bentley, Lamborghini and Porsche, in a position of “technological leadership” against its showroom rivals despite the lower overall spend.

The company spent €19.4 billion (A$31.56 billion) on research and development (R&D) in 2025 as part of a broader €34.4 billion (A$56.02 billion) technical outlay.

As part of Future Picture 2030, the smaller model range will also allow Volkswagen Group to reduce global production capacity to nine million vehicles, following factory closures that began in 2025 with its Brussels, Belgium, and Dresden, Germany, plants.

The company hasn't announced which models will be cut, although Porsche is reportedly winding back production of its first electric vehicle (EV), the Taycan, by 2030, with an electric Panamera expected to effectively take its place.

Changes to higher-volume models could include the removal of certain Sportback body styles from Audi’s range.

Slow-selling models such as the Volkswagen ID.5 EV and the Taigo, a small SUV not sold in Australia that overlaps with the T-Cross and T-Roc in size, could also be vulnerable.

Volkswagen Group is looking to recover after net profit fell from €17.9 billion (A$29.15 billion) in 2023 to €12.4 billion (A$20.36 billion) the following year, before dropping to €6.9 billion (A$11.24 billion) in 2025 on sales of 9.022 million vehicles.

The sharp decline in profit came despite relatively steady revenue and vehicle sales remaining above 2021 levels, when Volkswagen Group sold 8.567 million vehicles and recorded a €15.4 billion (A$25.08 billion) net profit.

After announcing plans in 2024 to cut 35,000 jobs by 2030, Volkswagen increased that figure to 50,000 in March 2026, before announcing 100,000 job cuts in June 2026.

Other German automakers have also recently announced workforce reductions, with BMW saying it will shed 8000 jobs by the end of 2027 after Mercedes-Benz announced cuts reportedly affecting up to 20,000 workers.

Data from Germany’s Federal Statistical Office released this month showed the country’s automotive industry shed 42,300 jobs in the 12 months to the end of June, a 5.8 per cent decline and the largest number of job losses across any German industry.

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