Volkswagen Group is offering early retirement packages to all 2,300 employees at its two manufacturing facilities in India
So, the VW brand as part of a broader operational restructuring in the world’s third-largest automotive market, according to media sources.
The German automaker, which operates the Volkswagen, Skoda, Audi, Porsche, Lamborghini and Bentley brands in India, currently holds approximately 2% market share, despite maintaining a presence in the country for more than two decades, media reported.
The voluntary early retirement scheme aims to “rationalise the manpower and align it with current needs,” a source familiar with the matter stated. The initiative has been introduced as both factories continue to operate below their installed production capacities.
Employees opting for the scheme will receive 75 days’ pay for each year served or each year remaining until retirement, whichever figure is lower, according to sources. Those who enrol within five to ten days will be eligible for an additional pay-out, media further added.
Skoda Auto Volkswagen, which has overseen the Group’s India strategy since 2018, confirmed that the scheme was introduced at the request of worker unions. The company stated that its restructuring programme is intended to strengthen operations while “reaffirming our long-term commitment to India.”
The restructuring coincides with a significant challenge for the automaker: India has issued a USD 1.4 billion import tax demand, alleging that the company evaded levies, a local daily reported. Volkswagen has denied the allegation.
Klaus Zellmer, CEO of Skoda, has emphasised the importance of growth in India, particularly as the brand has reduced its presence in China and exited Russia entirely.
Both Volkswagen facilities are located in Maharashtra, where the company manufactures models including the Skoda Kushaq SUV, Volkswagen Virtus saloon, and Audi Q3 and Q5 for domestic sales and export to markets such as Mexico and South Africa.
The company is currently seeking a local partner as it finalises plans for the next phase of investment in India, according to a local daily.
