Volkswagen CEO urges EU support for turnaround as Chinese rivals gain ground

Volkswagen (VWAGY)(VLKAF)(VLKPF) CEO Oliver Blume called on European policymakers to help the German automaker remain competitive as it undertakes a sweeping restructuring and faces growing pressure from lower-cost Chinese rivals, Reuters reported.

Speaking Sunday ahead of the Paris Motor Show, Blume said Volkswagen was simplifying operations across its brands, including VW, Porsche and Lamborghini. He described the overhaul as the company's most extensive transformation and said its success would depend partly on government policies that support European manufacturers.

Europe's largest automaker is cutting jobs and considering the closure of as many as four German factories. Investors are watching whether the restructuring can deliver lasting improvements in profitability, product development and software capabilities rather than simply reducing costs.

Chinese competition threatens profitability

Volkswagen has maintained roughly 25% of Europe's auto market over the past decade, but Chinese manufacturers such as BYD and Leapmotor are expanding their presence. A price war in China's domestic electric vehicle market has encouraged manufacturers to seek sales overseas, raising concerns about shrinking profit margins in Europe.

Blume has supported stronger European trade protections, including proposed rules favoring locally manufactured vehicles. He also welcomed a recent EU-China agreement that could reduce Chinese plug-in hybrid imports by more than half.

Volkswagen plans to showcase several affordable electric vehicles from its VW, Cupra and Skoda brands at the Paris Motor Show, along with its new ID. Tiguan electric SUV.

Gregor Williams, an analyst at Rhodium Group, warned that Chinese automakers' aggressive export strategies could undermine European manufacturers' profitability. The risk extends beyond lost market share if competition drives vehicle prices and industry margins sharply lower, Reuters reported.