VW Making Fewer Prototypes, Doing More Simulations To Cut Cost

According to a recent report, Volkswagen is reportedly facing labour issues and could face a walkout in Germany in a few days. According to the report, the automaker has turned down its union's cost-cutting suggestions at a time when failing to do so might result in the automaker closing its domestic operations for the first time ever.
VW is also taking cost reductions seriously. In order to get cars on the road for less money, Volkswagen is reportedly reducing the number of prototypes it produces and shortening development times.

According to Reuters, G Metall, the German union that represents employees at Volkswagen's German operations, suggested cost reductions of 1.5 billion euros . Bonuses for the next two calendar years were to be eliminated as part of the proposal.
In a reply, Volkswagen said, "Although there may also be positive effects in the short term, the measures will not lead to any sustainable financial relief for the company in the coming years." Volkswagen added that this would simply lead to new discussions in 2026 when it would be "an even more difficult environment."


In order to reduce expenses and increase profits as it attempts to compete with China's low-cost rivals, Volkswagen has asked for a 10% pay cut from its employees. It has already begun closing operations in other markets, like China, and for the first time in the company's history, it is planning to close plants in Germany.

Last month, Kai Grünitz, head of technological development at Volkswagen, told Automobilwoche that the company's top priority was to reduce development time. In an attempt to bring its EVs to market before they become out-of-date it is attempting to cut the lead time from 4-5 years to only 30-36 months, with models on an existing platform taking even less time.
However, VW is using simulation data to expedite this process, which implies fewer real-world tests. According to him, VW produced 40% fewer prototypes in 2024. The carmaker is conducting more virtual and bench testing to help make sure quality doesn't suffer. "We can now run the entire development chain with a digital prototype, shortening the product development process and reducing costs without sacrificing testing depth," he stated.

VW has a difficult future ahead of it since it must reduce expenses without sacrificing quality. VW has previously warned that it has only two years to turn its fortunes around, therefore it must exercise caution to avoid upsetting its employees, which may ultimately be disastrous.