VW Global (formerly known as Volkswagen AG) has done the unthinkable. They are closing all their factories in Germany and relocating to China and India. To be fair, they have been producing cars in China for decades already, but now they’re moving out of Europe entirely.

“We can make the same cars in Asia, to the same quality, and even with the EU tariffs, sell them in Europe for a greater profit,” said VW CEO Hans Blixen. “Germany is no longer competitive, for car manufacturing.”

Rumours of this move have been circulating in the media since 2024, but until now no date or schedule has been announced for abandoning Germany as VW’s HQ and primary manufacturing home. Despite the writing on the wall, it has come as a great shock to unions and government that VW is pulling out completely.

“We knew they would close some factories,” said Stefan Weber, a long-term employee, “but we never thought they would simply drop Germany in the gutter like this!”

VW claims it had no option but to face up to economic realities. After 91 years of operation, the recent declines in legacy automotive markets, coupled with the transition to electric cars, and the rise of China’s world-beating auto companies, left VW with no alternatives to radically changing their strategy. After decades of expansion and swallowing lesser brands from Skoda to Lamborghini, the time has come to downsize, trim the lineup, and kill off non-performing units.

“To think we began the revolution in China,” said executive Daniela Blume, “it was our biggest market and the Jetta was China’s most popular car!” Now the tables have turned, and BYD is one of the most popular brands in Europe.

While Germany reels in shock at the news, VW knows it will be a costly, protracted affair to extricate itself from Europe. But it’s the only option, if VW wants to survive for another 90 years.

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