Volkswagen on the Brink: Executives Admit Survival is at Risk

Volkswagen hits rock bottom: top management admits for the first time that its survival is at stake

Can Europe’s largest carmaker actually go bankrupt? According to a secret internal survey leaked by Manager Magazin and Der Spiegel, six of Volkswagen’s nine board members describe the current crisis as an "existential threat" to the group. The other three rate it as extreme tension. No one considers the situation "non-critical." The diagnosis is clear: the company faces a genuine question of survival.

The internal picture: six of nine executives see the precipice

The survey, conducted in recent weeks and accessed by German media, reveals unprecedented alarm within Volkswagen’s top management. The costly shift toward electrification, combined with falling sales in China and Europe, has led leadership to acknowledge that the traditional business model no longer works. The Dresden plant, emblematic but loss-making, is just a symptom of a deeper malaise. Meanwhile, Stellantis is also not having its best moment, but Volkswagen’s situation is especially severe due to its dependence on the Chinese market and its fixed cost structure.

The Chinese competitor: from imitator to executioner

"Ten years ago, Chinese cars were a joke. Today, they make better vehicles than Europeans at half the price," summarizes one of the most repeated voices in the crisis analysis. Decades of technology transfer—when European brands set up plants in China to lower costs—has backfired. Now, Chinese manufacturers offer electric and hybrid models with quality comparable to Volkswagen’s for around €8,000, compared to €30,000 for an equivalent European model. The gap is abyssal, and EU tariffs fail to close it. Some analysts argue that if barriers were removed, Chinese cars would flood the European market at unbeatable prices.

The burden of regulation and soaring prices

"They’ve put so much nonsense in cars from the EU that prices are outrageous," summarizes a consumer. An example: the hybrid Volkswagen Caddy costs €50,000; the diesel version, €40,000. And the basic Golf in Spain starts at €27,000, while in Germany it can be found for half that. Emission regulations, mandatory safety systems, and excess onboard technology—screens, sensors, assistants—have made vehicles so expensive they have become an inaccessible luxury for many families. "I just want an engine, four wheels, and air conditioning," complains the same consumer. But the industry has gone in the opposite direction, and now pays the consequences.

Is there a way out or is it the beginning of the end?

Among the proposals being considered to overcome the crisis, some advocate drastically reducing prices—"Polo at €8,000 and Golf at €12,000"—and focusing on reliability and after-sales service, rather than competing on screens and karaoke. Other voices suggest buying hybrid patents from Toyota, whose HSD system has demonstrated its efficiency for decades. But most agree that time is running out. Toyota has already warned: "Either we learn to be more efficient or China will surpass us, and we may even disappear." At Volkswagen, this warning no longer sounds like science fiction.

Meanwhile, at the Wolfsburg headquarters, they must be wondering if the 'people's car' is becoming nobody's car.