German automotive giant Volkswagen is considering closing its production plants in Germany to cope with rising costs, said the company on Monday.

Vehicle plant and component factory closures can no longer be ruled out in the current situation, barring rapid countermeasures, German Press Agency quoted the carmaker as saying.

Alongside these potential closures, the company has also hinted at possible layoffs. Volkswagen said it had to cancel a long-standing agreement with labor unions in Germany, which has been in place since 1994 and aimed to prevent compulsory redundancies until 2029. The step has not yet been agreed with the employee side.