Volkswagen, Europe's largest industrial group, said it will make "massive" investments in the United States. The group, including Porsche, revealed it has had a direct conversation with Donald Trump's administration as it faces damage to tariffs.

Oliver Blume, who heads the group, said the negotiations were "constructive" and "fair", and showed in an interview that the company had a market capitalization of £44 billion and was unwilling to leave tariff negotiations to Brussels.

Speaking to Süddeutsche Zeitung, Blume said he had been to Washington and had a direct route directly with U.S. Commerce Secretary Howard Lutnick, but agreed to keep the details of the negotiations confidential.

He hopes that the plan to make large investments will help shape Trump's final decision on the 25% tariff on U.S. auto imports in April.

"Our main contact was the U.S. Secretary of Commerce, but ultimately, these issues also run through the U.S. President's table," he said. "We've experienced absolutely fair, constructive discussions so far. Of course, many things are complicated and we agree not to share anything. I'll stick with it."

His interview comes ahead of the latest round of talks between the EU and the United States, with EU Trade Commissioner Maroššisfčovič expected to meet on the sidelines of the OECD Council meeting in Paris on Tuesday.

There is a general expectation that about 10% of the benchmark tariffs could be outside the July expiration date where Trump paused 90 days.

Bloom said he was speaking to Washington on behalf of Volkswagen, but always "focused on solutions that can be widely applied."

He said Volkswagen Group "intention to continue investing in the United States" and will establish a partnership with US electric vehicle maker Rivian and use "further large-scale investment."

Referring to the tariff talks, he added: “All of this should play a role in decision-making”.

The past year has been one of the group's most challenging years, with the EU soaring sales of electric vehicles in China, and Volkswagen has yet to enter the market as an entry-level competitor.

Trump's tariffs on car imports will be particularly severe because unlike Volkswagen models and German counterparts BMW and Mercedes-Benz, Porsche cars sold in the United States are almost made in Germany.

The German auto sector failed to anticipate competitive attacks from China to be seen as a symptom of even more discomfort in the industry, with Volkwagen planning to lay off 35,000 jobs in 2030.

In March, the company revealed that its net profit fell 30% year-on-year due to high production costs and lower sales in China.

Asked what the biggest mistake made by German manufacturers was, Bloom said: “We have been on the laurel for too long” and “realizing it was too late and the world is changing rapidly and dynamically”.

He said the German auto industry needs to stop spending "endless time...debate" and "decision and action".

According to industry data, sales of electric vehicles in the EU exceeded three times between 2019 and 2023, while Brussels' 10% tariffs in 2024 slowed growth.

However, the EU still believes that China has not done enough to level the playing field and faces new concerns that Chinese goods initially targeting the United States will be transferred to Europe in the long term.

Blume defended the company's electric vehicle strategy, saying it will launch Volkswagen, Cuzra and Skoda Evs for about 25,000 euros, followed by cheap entry-level cars labeled "id.every1".

He admits that layoffs are “painful”, but if the company “want to survive for a long time”, “something has to happen.”