Volkswagen crisis prompts Italian government to assess automotive supply chain impact

The German automaker Volkswagen faces a severe corporate crisis, with internal surveys indicating that six of nine board members consider the group "at risk of survival" and recent quarterly results showing a sharp drop in operating profit and sales, especially a 20% decline in China and a 9% decline in North America. The company is undertaking cost‑cutting measures, including nearly €1 billion in expense reductions and plans to eliminate about 20,000 jobs in Germany by 2030.

Italian Industry Minister Adolfo Urso warned that the turmoil at Volkswagen could reverberate through Italy’s auto‑component sector, which exports roughly €5 billion of parts annually, about 20% of which go to Germany. He announced an automotive round‑table for 14 July to examine the fallout and to accelerate Italy’s “green‑deal” and Made‑in‑Europe strategies, aiming to direct public funds toward domestic suppliers rather than foreign‑made electric vehicles. Urso highlighted that while some high‑tech firms are gaining market share from German suppliers, many small‑scale manufacturers tied to traditional combustion‑engine components are especially vulnerable.