Why German automakers are culling their nameplates

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The challenges facing the European automotive industry are well known. Profits have fallen as automakers have lost volume and market share in China, the world’s largest passenger car market, while Chinese OEMs are making further inroads into Europe.

For the major German automotive groups in particular, operations in China once generated huge cash inflows and often made up the majority of annual profits. Those days are gone, intensifying the need for radical action to improve profitability and competitiveness.

Because of these challenges, German OEMs are scrutinizing where they invest capital and which models still merit a place in their portfolios. The result could be a sweeping nameplate cull as automakers eliminate less profitable and overlapping models to cut costs and sharpen their competitive position.

Volkswagen takes the lead on nameplate cuts

Volkswagen Group (VW) is a prime example of this automotive industry trend. As part of another major restructuring, CEO Oliver Blume has outlined plans to gradually slash up to 50% of the company’s global model portfolio by 2030. Doing so in just four years underscores the urgency of the task.

In practical terms, the plan will require the company’s engineers and accountants to scrutinize every model’s profitability. That process could prove useful given the size of VW’s portfolio, which currently includes nearly 150 models.

Ironically, this unwieldy lineup stems from the very strategy that fueled VW’s sales and profit growth: platform sharing across brands and segments. The iconic VW Golf, for example, has shared its platform with the Audi A3, the SEAT Leon and the Škoda Octavia since the late 1990s.

This kind of overlap can also occur within a single brand. The VW passenger car brand currently offers three models—the Tiguan, the T-Roc and the Taigo—that compete against each other in the European SUV-C segment. In today’s more challenging market, maintaining multiple models that compete within the same segment is increasingly difficult to justify.

At the other end of the VW Group brand spectrum, Porsche is also looking to significantly rationalize its lineup by focusing on “core sports car DNA, design and exclusivity.” This process could mean markedly fewer variants, although the company will continue to invest in a multi-powertrain strategy after making a U-turn on electrification. Entry-level 911 models will remain ICE-powered with some electrical assistance, while GT models will remain pure ICE. But Porsche is likely to offer fewer variants overall, simplifying a range of products that can be confusing for those new to the brand.

BMW weighs further nameplate cuts

The BMW Group is also reportedly considering culling a significant number of nameplates as new CEO Milan Nedeljković focuses on improving financial performance. The company’s non-core models are coming under review, with reports suggesting that the XM is unlikely to be directly replaced as part of the company’s cost-cutting efforts.

There are also questions about the future of the i4. BMW had been expected to introduce a new generation with a coupe-style four-door body based on the all-new bespoke Neue Klasse architecture, mirroring the relationship between the current ICE 4-Series and ICE 3-Series. In addition, the X4 is being phased out at BMW’s US plant in Spartanburg, South Carolina, while the 2-Series Active Tourer looks increasingly out of place as BMW shifts resources toward its more profitable compact SUVs, the X1 and X2.

Press reports have also cited the 8-Series Coupe and its four-door sibling the 8-Series Gran Coupe as potential casualties. However, neither appears in Mobility Global’s sales or production forecast beyond this year, highlighting an important distinction between models being cut in response to current market pressures and those that were already nearing the end of their planned life cycles.

The 8-Series is nevertheless an interesting case study. Launched in 2019 as part of former CEO Harald Krueger’s push to strengthen BMW’s premium credentials, it initially sold reasonably well for a high-end model, but it is now showing its age.

Can German automakers cut nameplates without losing differentiation?

This raises a broader question for the German premium brands: if they want to offer six-figure models to reinforce their premium credentials and distinguish them from emerging Chinese competitors, how much must those high-end models differ from lower-priced offerings to make them feel truly exclusive? Shared components, interior designs and equipment options can help drive scale and improve supply chain security, but they can also make it harder for high-end vehicles to feel special.

As German OEMs decide which nameplates to keep and which to cut, they must avoid eliminating the models that make their portfolios distinctive. Cutting too many niche and lower-volume model ranges risks leaving lineups dominated by SUV-C and SUV-D crossovers, with less to differentiate them from the Chinese competitors that spurred the great nameplate cull in the first place.

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