Volkswagen's controlling families push for urgent cost cuts

Volkswagen's controlling shareholders have issued a stark warning to management, urging immediate action to secure the company's long-term competitiveness. The call comes as the German automaker grapples with rising competition from Chinese rivals and declining profitability.

Hans Dieter Poetsch, chairman of Porsche SE — the investment vehicle of the Porsche and Piech families — described the current moment as a "historic crossroads" for the Volkswagen Group. He stressed that all stakeholders must now take responsibility to ensure the company's sustainable future.

"The longer decisions are delayed, the bigger the problems will become," Poetsch said, signaling growing impatience among the controlling families.

Porsche SE's finance chief, Johannes Lattwein, echoed these concerns, calling on Volkswagen to reduce excess capacity, significantly lower costs, and streamline decision-making processes.

The urgency follows a challenging financial period. Porsche SE reported a 14.5% drop in adjusted half-year earnings after tax, which fell to €949 million. The company holds a 31.9% stake in Volkswagen and a 12.5% stake in its sports car subsidiary, Porsche.

The families' unusually direct message underscores the pressure on Volkswagen's leadership to accelerate its cost-cutting program and adapt to a rapidly changing global automotive market.