BERLIN, Dec 18 (Reuters) - Volkswagen is making progress with its cost-cutting drive, the head of the German carmaker's core brands said in a media interview on Thursday, pointing to headcount reductions and savings at the group's plants in Germany.

The company has reduced costs at its factories in Wolfsburg, Emden and Zwickau by 30% on average, brand CEO Thomas Schaefer told the Auto Motor Sport industry magazine.

On top of this, some 25,000 workers have signed partial retirement or severance agreements, he added.

"We still have a way to go, but together we want to prove that it is possible to develop and build competitive cars in Germany," Schaefer said.

In December 2024, Volkswagen struck an agreement with unions to drastically restructure its German operations, including 35,000 jobs cuts by 2030, as it faces off with cheaper Chinese rivals and navigates a slower-than-expected shift to electric.

On Tuesday, the European Commission dropped its hard cut-off for new combustion-engine cars from 2035, bowing to calls from Volkswagen and other carmakers for greater flexibility.

Schaefer ruled out offering combustion engines in the core brands' new small-car family, whose first model - the ID.Polo - is to be launched next year at a starting price of around 25,000 euros ($29,307.50).

This wouldn't make sense due to emissions regulations and would be too expensive for consumers, according to the executive.

"The future in this segment is electric," he said.

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