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STORY: Volkswagen could close factories in Germany for the first time in its history.

And that’s a sign of just how much pressure Europe’s top carmaker faces from new Asian rivals.

The company’s works council has vowed to fiercely oppose any such move.

It says VW has identified one large vehicle plant and one component factory as obsolete.

The move will mark the first big clash with unions for chief executive Oliver Blume, who had been seen as more of a consensus builder.

He has told management that factors including a difficult economic environment and new Asian rivals demand action.

The company has seen a sharp loss of market share in China, where it is struggling to compete with local players like BYD.

All that has seen VW shares lose around a third of their value over the past five years.

But the company employs some 680,000 workers, and is a symbol of German industry, making it politically charged.

The last time it tried to make major changes, back in 2022, the moves were defeated by the powerful IG Metall union.

Now its new plans will be a worry for German chancellor Olaf Scholz and his coalition government, already under pressure after losing a regional election to far-right rivals over the weekend.

So far, the economy ministry has called on VW to act responsibly, but declined to comment on the planned cuts.

On Wednesday, top executives are expected to address the works council over the possible changes.

Council head Daniela Cavallo promised it would be a “very uncomfortable” meeting for the firm’s management.