German Premier Suggests Volkswagen Produce China-Developed Models Locally to Secure Jobs

Germany's Lower Saxony premier, a major Volkswagen shareholder, suggested producing China-developed models locally to secure jobs and boost plant capacity. This comes amid reports of potential factory closures and significant job cuts at the automaker. The move could foster innovation and stabilize employment, countering the trend of production shifting abroad. Porsche is also reportedly considering bringing Cayenne SUV production back to Germany.

Volkswagen could secure jobs in Germany if it produced auto models there that it currently develops in China, the premier of the German state of Lower Saxony, a major shareholder, was quoted as saying. Lower Saxony premier Olaf Lies made his remarks to German news agency DPA following reports on Friday that the embattled carmaking giant is considering shutting four German factories and ramping up job cuts to as many as 100,000. "If we produced vehicles here that we currently make in China, we could stabilize capacity utilization of our plants," Lies said in an interview published at the weekend. "This would also create the opportunity for new development and innovation at our locations. To me, it's about stabilizing employment and capacity utilization at our plants, instead of watching others build new plants outside of Germany."

Lower Saxony, where Volkswagen is based and where it operates five of its six western German assembly plants, has a 20% voting stake in the company.

Volkswagen is under pressure from Chinese rivals, U.S. import tariffs, as well as dwindling demand in Europe, which the firm has said makes its business model unsustainable. Lies, a member of the centre-left Social Democrats, had floated the idea of exploring production of cars made for the Chinese market in Germany after a visit to China in April. On Saturday, the Frankfurter Allgemeine Zeitung newspaper reported that Volkswagen's subsidiary Porsche is looking at shifting production of its Cayenne SUV from Slovakia to its Leipzig plant in Germany to boost capacity utilisation.