The comments by Jefferies come after Volkswagen earlier this month said it was considering shutting plants in Germany for the first time in its history, a move aimed at bringing down costs as Asian competition is closing in.
"The rationale to re-size VW's namesake is not new but management's sense of urgency and determination to tackle excess capacity and spending patterns both are," Jefferies analysts said in a note.
"Three days on the road ... with management gave us conviction that there is no plan B that would rule out capacity reduction," Jefferies said, adding decisions could lead to provisions of 3 to 4 billion euros (USD 3.3-4.4 billion) already in the fourth quarter.
Volkswagen was not immediately available for comment.
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