Volkswagen chief executive Oliver Blume has endorsed European Union proposals to strengthen the bloc's domestic industry, saying European carmakers must be able to "compete under comparable conditions" with Chinese rivals. Speaking in Paris ahead of the city's motor show this week, Blume said the EU's "Made in Europe" rules "must reward real value creation in Europe".
The proposals, formally known as the Industrial Accelerator Act, would limit subsidies and public procurement to products with a large share of materials and manufacturing sourced within the EU. They are aimed at countering the rapid rise of lower-priced Chinese brands in the automotive sector and other key manufacturing industries. "Companies that invest and develop in Europe must see a clear benefit," Blume said. He added that those selling in Europe should also "create jobs and value here". Volkswagen believes in open markets, he said, but openness "also means standing up for our own interests in Europe", because a strong industrial base protects technological independence.
The comments came days after the EU said it had reached what it called a landmark deal with China to "halve" sales of Chinese hybrid cars in the bloc, amid fears that surging sales could undermine parts of the European car industry.
Volkswagen, Europe's largest carmaker, is among the companies hardest hit by the changes. Blume listed several pressures: high energy costs, weaker demand as consumers struggle with high inflation, the need to develop cars faster, and intense Chinese competition. French broadcaster RFI also points to US tariffs and a weak European market. The group has launched a sweeping restructuring that The Guardian reports could cut as many as 100,000 jobs, which Blume called the "largest transformation programme in its history". RFI reports that a new plan announced this summer puts a further 50,000 jobs worldwide at risk, following an earlier programme in December 2024. The future of the group's showcase electric-vehicle plant in Zwickau, in the eastern German state of Saxony, appears under threat, and workers there protested in July at the call of the IG Metall union.
Chief financial officer Arno Antlitz said the cuts were needed to "increase our economic power" through higher profitability, allowing the company to defend its "home turf". Volkswagen is also halving the number of models it sells worldwide, from 150 to 75 across brands including Audi and Škoda, to reduce complexity in factories and for dealers and lower the cost of each vehicle.
Volkswagen is exhibiting at the Paris show for the first time in 20 years. Blume stressed the "close ties between France and Germany" while hosting French industry minister Sébastien Martin, and the company unveiled the production version of its all-electric ID Tiguan.
Why it matters: the debate shows how European industrial policy is increasingly being shaped by competition with China, with the continent's biggest carmaker now publicly lobbying for rules that favour local production while it cuts jobs at home.