Volkswagen Sharpens Strategy With €160 Billion Investment Plan

Volkswagen Group has outlined a revised long-term investment strategy, committing €160 billion (approximately $186 billion) through 2030, as confirmed by CEO Oliver Blume. The updated plan reflects a more cautious spending approach as the automaker navigates significant headwinds in two of its most critical markets: China and the United States.

This latest allocation is part of Volkswagen’s annual rolling five-year investment review. The figure marks a slight reduction from its previous plans—€165 billion for 2025–2029 and €180 billion for 2024–2028, with 2024 representing the peak of its recent investment cycle.

Tariffs and Competition Tighten Market Conditions

Volkswagen, whose portfolio includes major brands such as Porsche and Audi, continues to face pressure from:

• Higher U.S. import tariffs, affecting vehicle pricing and margins.
• Intensified competition in China, particularly in the electric vehicle segment.

These challenges have had a pronounced impact on Porsche, which relies heavily on both the U.S. and China—markets that account for roughly half of its global sales. The brand has already begun scaling back parts of its electric vehicle roadmap as profitability narrows.

Prioritizing Europe in the New Spending Framework

Blume emphasized that the updated investment blueprint would place greater focus on Germany and Europe, particularly in:

• Product development
• Advanced technologies
• Infrastructure and manufacturing

He also confirmed that discussions around an expanded savings program at Porsche will continue into 2026.

Porsche’s China Strategy: Stability Over Expansion

With Blume preparing to step down as Porsche CEO in January to concentrate solely on leading Volkswagen Group, he shared candid expectations for the luxury brand’s presence in China. Porsche, he stated, should not expect growth in the Chinese market in the near term.

However, opportunities remain on the table:

• Localization of production within the broader Volkswagen network
• The potential for a China-specific Porsche model tailored to local preferences

Regarding the U.S. market, Blume noted that the prospect of a dedicated Audi plant would depend heavily on substantial financial incentives from U.S. authorities.

Leadership Confidence Despite Shareholder Concerns

Blume’s recent contract extension as Volkswagen CEO, now running through 2030, underscores the continued confidence of Volkswagen’s key stakeholders—the Porsche and Piëch families and the state of Lower Saxony. Still, he acknowledged investor concerns following Porsche’s underwhelming stock performance since its IPO three years ago.

“It is true that shareholders have suffered losses,” Blume said. “I must also face this criticism.”