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It comes as Germany’s economy shrank in the three months to the end of September.
The 0.1pc drop in output reported by the country’s statistics office came following high energy prices, a high cost of borrowing and weak consumer demand.
Factory output for Germany, Europe’s manufacturing powerhouse, fell to a three-year low in September, dragged down by weak car production.
Output fell 1.5pc compared to August, the lowest production since 2020, with carmakers and their suppliers’ production figures dropping 5pc.
Germany’s carmakers are suffering from slower demand, particularly for electric vehicles, as buyers’ incomes are squeezed by higher bills driven by soaring energy prices, and also by the higher interest rates central banks have unleashed in order to tackle that inflation.
Last month, German luxury carmaker Porsche said soaring borrowing costs and rising prices were even starting to bite its wealthy buyers.
Sales are starting to slip in China, which has in recent years grown as an important market for luxury carmakers. Porsche, part-owned by Volkswagen, suffered a 12pc revenue drop in the country in the first nine months of the year.
Mercedes had made a similar warning, saying electric carmakers face a “brutal” market as competitors slash their prices and its wealthy customers tighten their belts.
It said its profit margins narrowed as it had to cut prices while its own costs including wages and raw materials stayed high.
A Volkswagen spokesman said: “The Volkswagen brand has launched an ambitious performance program, and the employee representatives are involved in its development.
“As a result, all costs and areas will be critically analysed. As proven during the transformation, the company will continue to use the potential of personnel development along the demographic curve. There is no total target for reducing the number of employees at Volkswagen.”
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