As Volkswagen and unions gear up for the next round of talks over wages and plant closures in Germany, company and industry data reviewed by Reuters show that the automaker spends a higher proportion of sales on labour costs than major rivals. The data, in an internal memo by Volkswagen's works council reviewed by Reuters, underscores the company's challenge to remain competitive in its pricey home market as cheaper models from China arrive. Management will start the next round of negotiations with unions representing roughly 120,000 German workers on Thursday. Unions are demanding a 7% pay rise, while Volkswagen is threatening a 10% cut. The proportion of revenue spent on labour at Volkswagen globally has fallen from 18.2% in 2020 to 15.4% in 2023 - but that ratio still exceeds BMW, Mercedes-Benz, and Stellantis, which spent between 9.5% and 11% in 2023, according to the works council memo.