Volkswagen Board Reviews Model Reductions After First-Quarter Results

Volkswagen's supervisory board met to discuss reducing the company's global model lineup by as much as half. The proposal follows first-quarter results showing profit of €1.6 billion, down 28 percent from the prior year, and sales volume down 2 percent.

Sales in China fell 20 percent in the first quarter, continuing a multi-year decline. In the European Union and Britain, Chinese automakers sold more vehicles in May than Japanese manufacturers, according to data from the European Automobile Manufacturers' Association.

CEO Oliver Blume stated the company would enter the next phase of its transformation. The board discussion also addressed plant closures and job reductions, according to Reuters reporting on the meeting.

In Neckarsulm, where Audi assembles vehicles, worker Cayli Halin said a plant closure would affect the local economy. "If Audi dies, everything here dies," Halin said. IT worker Ali Alp Cagan said the overall situation at the plant is nervous, though he does not expect personal layoffs.

Workers leaving the plant attributed the company's position to a failure to innovate and to lower prices from Chinese manufacturers.

The company has not released a timetable for model reductions or identified which plants would be affected.