The pressure has only increased since Blume stepped down from his dual role as Porsche CEO at the start of the year. His departure from Porsche followed a crisis at the luxury brand and left him fully focused on Volkswagen Group. Although he received a five-year contract extension as group CEO — a sign of confidence from top shareholders — investors now expect delivery, not promises, News.Az reports, citing Reuters.
Volkswagen and Porsche have together lost around €48 billion in market value during Blume’s tenure. That decline has sharpened scrutiny of his strategy, particularly among shareholders who believe the next 12 months will determine his legacy.
At the heart of Volkswagen’s challenge is China. Once the company’s most profitable market, China has transformed from a cash cow into a problem zone. Volkswagen was overtaken by domestic rival BYD in 2024 and slipped further behind Geely in 2025. Even premium brands Audi and Porsche have struggled to maintain momentum.
Blume’s response is a bold “in China for China” strategy. Volkswagen is shifting technology development and vehicle design operations to China to better match local consumer preferences and speed up innovation. There are also plans to export Chinese-made vehicles to other markets in the future. Supporters of the plan say it finally addresses years of underestimating local competition.
However, investors remain cautious. Expanding Chinese production for foreign markets would require approval from powerful German labour unions, which have already accepted painful job cuts in recent years. Any resistance from unions could slow or block Blume’s plans, raising concerns that the strategy is still heavy on diagnosis and light on concrete execution.
Alongside China, software has become Volkswagen’s other defining battle. The industry’s shift toward software-defined vehicles has exposed weaknesses in Volkswagen’s in-house software unit, Cariad. Repeated delays there contributed to the departure of Blume’s predecessor. To close the gap, Blume placed a high-risk bet: a $5 billion joint venture with U.S. electric vehicle maker Rivian to develop a next-generation electronics and software platform for Western markets.
That partnership is now seen as mission-critical. Winter testing of the new platform is underway in Sweden, and the next investment tranche depends on successful progress. Investors describe the Rivian venture as the most fragile — but most essential — element of Blume’s turnaround plan. A failure here could leave Volkswagen dangerously behind competitors in a market where software performance increasingly defines brand value.
Despite the challenges, there are signs of cautious optimism. Volkswagen recently reported stronger-than-expected cash flow for 2025, raising hopes that early restructuring efforts are gaining traction. Some investors believe Blume’s deep technical background and experience in China give him an advantage in navigating the transition.
Major shareholders, including the Porsche-Piech family holding group, have publicly expressed support but made clear that consistent implementation is now key. Industry watchers note that leadership contracts offer no guarantees at Volkswagen — a reminder of how quickly confidence can shift if results fall short.
For Blume, the message from investors is clear: the strategy is in place, the diagnosis has been made, and the time for execution has arrived. Whether he can revive Volkswagen’s position in China, modernize its software capabilities, and restore market confidence will define not only the company’s future, but also his own standing as one of Europe’s most closely watched automotive leaders.
