Volkswagen plans to cut models by up to half

Volkswagen announced it would cut the number of models it offers by as much as half to reduce costs and better compete with Chinese companies. The plan was released after a board meeting. The company's profit fell 28 percent in the first quarter to €1.6 billion and its sales were down 2 percent. Volkswagen's sales in China plunged 20 percent in the first quarter after falling for several years.

In the European Union and Britain, Chinese automakers collectively sold more vehicles in May than Japanese carmakers, according to data from the European Automobile Manufacturers' Association. About one in five new vehicles sold in Europe is electric, and sales have surged this year because of the increase in fuel prices caused by the war with Iran.

Chancellor Friedrich Merz and his government have attempted to boost the industry with new subsidies and by pushing EU officials in Brussels to relax automotive regulations.

Neckarsulm, in south-west Germany, where 15,000 workers assemble models for Volkswagen's luxury Audi brand, residents fear a plant closure would devastate a local economy built around the rhythms of factory shifts. "If Audi dies, everything here dies," said Cayli Halin, 54, who works in the plant's testing centre.

Ali Alp Cagan, 31, has worked as an information technology professional at Audi for almost two years and isn't personally worried about layoffs because he considers his job prospects to be strong. "Overall, however, the situation is already nervous," he said.

Cagan and other workers leaving the plant for a recent shift change blamed the company, saying it had failed to innovate and that China now builds cheaper and better cars.