June 30, 2026 – Volkswagen’s major shareholder, Olaf Lies, Minister-President of Germany’s Lower Saxony, has publicly called for the automaker to shift production of some models currently developed and manufactured in China back to German facilities, a move he argues will shore up underutilized local plant capacity and safeguard domestic jobs.
The proposal comes on the heels of last week’s revelations that Volkswagen is weighing a sweeping restructuring plan that could shutter four of its German factories and expand layoffs to as many as 100,000 roles, marking the most drastic overhaul in the group’s nearly 90-year history.
Lies emphasized that relocating these China-originated vehicle lines to Germany would not only lift factory capacity utilization rates but also unlock fresh opportunities for local R&D and technological innovation. As the home of Volkswagen’s global headquarters, Lower Saxony hosts 5 out of the automaker’s 6 assembly plants across western Germany, and the regional government holds a 20% voting stake in Volkswagen, granting it significant sway over all major corporate decisions.
The idea was first floated by Lies back in April, right after his official visit to China, when he initially proposed a feasibility study on producing China-market targeted vehicles on German soil. Volkswagen has openly acknowledged that its longstanding business model is no longer viable, squeezed simultaneously by cutthroat competition from domestic Chinese automakers, rising U.S. import tariffs, and slumping demand across the European market.
In a parallel move to optimize capacity, Volkswagen’s premium subsidiary Porsche is reportedly evaluating a plan to move all production of its Cayenne SUV from its current Bratislava facility in Slovakia to the brand’s Leipzig plant in Germany, specifically to boost output efficiency at the underused eastern German factory.
