Volkswagen Group China's headquarters in Beijing Photo: VCG

Volkswagen Group China is continuously optimizing the cost efficiency of all departments and projects, the company said in a statement sent to the Global Times on Monday, in response to the question that the German car maker is reportedly laying off employees in China.

Volkswagen has begun to trim corporate jobs in China as part of its plan reduce overhead by a target of 20 percent globally over the next three years, Bloomberg reported. The report said, citing an unnamed person claiming to be familiar with the matter, that the cuts amount to several hundred local staff at the group level.

In response to the reported job cuts, the company told the Global Times that in 2023, the Volkswagen Group launched Performance Programs across all brands to maintain economic success despite challenges in the automotive industry. Thereby, the group has set up a clear target to improve efficiencies by 2026 by 20 percent compared to 2023, the company said.

"Like all divisions of the Volkswagen Group, Volkswagen Group China also makes a significant contribution to the global performance program... this includes reorganizing structures, digitizing processes, using synergies within the China region and increasing the localization of tasks," Volkswagen Group China said in its statement.

In this context, Volkswagen Group China said that it is continuously optimizing the cost efficiency of all departments and projects. "Depending on the measure in question, this may also include direct and indirect personnel costs, including administrative, travel and training costs," the company said.

This came as Reuters reported this week that Volkswagen plans to stop production at one of its combustion engine car plants in China.

Responding to the report, the German car producer told Yicai.com that based on corporate strategic planning and in response to market trends, it is normal and necessary business behavior for companies to make adjustments to their production base.

This adjustment is not only a positive response to current trends, but also proactive planning and investment for future development, the company said.

As the Chinese car industry is becoming competitive, with many domestic companies taking the lead in terms of technology and productivity, including in the electric vehicle (EV) sector, Volkswagen Group China must continue to facilitate its digitalization as well as transformation from traditional gasoline cars to EVs in order to better adapt to the fast-developing industry and gain more competitive advantages, Cui Dongshu, secretary-general of the China Passenger Car Association, told the Global Times on Monday.  

Global Times