On Thursday, Volkswagen's supervisory board unanimously approved the "Future Plan 2030" — the most radical transformation in the company's 89-year history. What sounded like a catastrophe scenario three months ago is now reality: 100,000 jobs will be eliminated by 2030. That's double the number announced back in March.
The stock? It jumped more than six percent today. Investors are celebrating the courage to make tough decisions.
The Story Behind It
CEO Oliver Blume has a problem: Volkswagen is too big, too slow, too expensive. Chinese competitors produce cheaper. Tesla and other tech firms develop faster. VW still sells millions of cars — but profit margins are shrinking.
In June, Blume's internal plan went public: close four factories, cut 100,000 jobs, halve the model range by 2035. The works council and IG Metall union pushed back hard. "We will prevent this with all our might," they said at the time.
But Thursday brought a surprise: The supervisory board — which includes employee representatives — voted unanimously in favor. Why? Because Blume postponed one decision: The core VW brand will not be spun off as a standalone company for now. That took the pressure off the employee representatives, and they agreed.
What This Means for You
If you own VW shares: The market believes the plan will work. +6.5 percent in a single day is a clear signal. Year-to-date, VW is now up +16.75 percent — the DAX only managed +5.9 percent in the same period.
If you work in the automotive industry: VW is showing where the journey is headed. Fewer models, leaner structures, tougher competition. BMW announced 8,000 job cuts in August. Mercedes lowered its China forecast. The German auto industry is under massive pressure.
If you're considering investing in automakers: VW is now valued cheaper than almost all other major manufacturers. P/E ratio of 7.8. Dividend yield of 6.5 percent. But: The transformation is brutal, and whether it succeeds won't be known for a few years.
How Pros Are Reacting
Analysts see an average price target of €104.50 for VW — that would be another +29 percent from today. But: They only believe it if the company actually cuts 50,000 positions and radically simplifies its cost structure.
The biggest question: Can Blume pull this off? His two predecessors, Herbert Diess and Martin Winterkorn, both failed due to resistance from employee representatives. Blume has now taken the first big step — but implementation will take years.
Pros are also watching China: VW generates a quarter of its revenue there, but Chinese EV makers like BYD and NIO are catching up massively. If VW continues to lose market share in China, even the most radical overhaul won't be enough.
First Steps for Beginners
If you're wondering whether to buy VW now: The stock is cheaply valued, but volatile. This isn't a "relaxed ETF purchase." It's a bet that an 89-year-old company can successfully reinvent itself.
If you already own VW shares and are considering selling: The 6.5 percent dividend yield is one of the highest in the DAX. Many long-term investors hold for exactly that reason. But: If the overhaul fails, the dividend will be cut.
If you want to invest in German automakers in general: Look at the entire industry. Mercedes, BMW, Porsche — all are under pressure, but each has a different strategy. VW focuses on volume and efficiency. Porsche on luxury and margins. BMW on technology and hybrids.
And remember: The automotive industry is undergoing the biggest transformation in a hundred years. Electric, software, China, autonomous driving — anyone investing here must be prepared for a bumpy ride.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not an indicator of future results.