Volkswagen offers early retirement to 2,300 workers in two of its factories in India

Volkswagen Group has offered early retirement to all 2,300 workers at its two factories in India, sources said. The move aims to tackle challenges in growing its share in India’s automotive market, where it holds about 2 per cent despite over 20 years of presence.

The scheme targets blue-collar staff at the Maharashtra factories, which produce vehicles like the Skoda Kushaq SUV, Volkswagen Virtus sedan, and Audi Q3 and Q5 for both domestic and export markets. Both plants are running below capacity. The offer seeks to optimise manpower and match workforce size with current needs.

Employees who opt for the scheme will get 75 days’ pay for each year served or left until retirement, whichever is less. Those who accept within five to ten days will receive an additional payout.

A source said the company wants to "rationalise manpower and align it with current needs," adding that Volkswagen intends to "continue paying competitive wages and keep the plants operational." The early retirement is voluntary and was introduced at the request of worker unions.

Skoda Auto Volkswagen, leading the group’s India strategy since 2018 and seeking a local partner for future investments, confirmed the scheme was union-requested. The group is also contesting a $1.4 billion import tax demand, which it denies.

Volkswagen continues to sell brands like Skoda, Volkswagen, Audi, Porsche, Lamborghini, and Bentley in India but has not significantly increased its market share. Skoda stated the restructuring aims to strengthen the business and "reaffirm our long-term commitment to India," while seeking further investment and local partnerships for growth.