Volkswagen CEO warns of shrinking European market amid intensified competition

Volkswagen CEO Oliver Blume has pointed to a declining European automotive market and increased competition as the major reasons for his desire to change the German car manufacturer significantly. Speaking in an interview, Blume outlined the issues Volkswagen is facing, where he said, “The cake has shrunk, and more people have to share it.”

Blume’s comments surfaced at a time when car sales are on the decline in Europe for Volkswagen and red hot Asian competitors are emerging. This change has forced the company to evaluate the way it operates within its home market.

In response to these pressures, Volkswagen said on Monday it’s exploring a major restructuring of its business, possibly following through with factory shutdowns in Germany and doing away with job protection at six factories. This decision is in line with the overall plan known as the Change and Performance Program, which entails cutting a total of 10 billion euros (USD 11 billion) from the company’s cost structure in order to enhance efficiency and profitability.

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The proposed adjustments are indicative of a major automotive manufacturer’s attempt to respond to a changing market environment. Continued competition in the already challenging European automotive market and changes in consumer tastes mean that Volkswagen’s plans indicate a fundamental overhaul of its business model to remain competitive and profitable.

Its proactive approach demonstrates the industry’s developments where traditional car manufacturers are under increased pressures due to intensifying competition from global automotive players and shifting economic situations.