Volkswagen CEO Oliver Blume indicated on Sunday that he's trying to avoid closing plants at the German storied automaker, and would still look to turn around its performance after years of struggling with higher competition and domestic pressures.

The Wolfsburg-based company in particular faces pressure to cut costs at home and increasingly intense competition in the lucrative Chinese market.

Last week, Volkswagen said its "fundamental realignment" over the past three years had reached its next phase, announcing plans to streamline the model lineup by up to half.

It didn't provide specifics, and questions remain over how else it will cut costs. There has been renewed speculation about the future of several plants in Germany.

"There are more intelligent solutions than closing plants," Blume told the Bild am Sonntag newspaper.

He added that a cost-cutting program in Germany is already producing effects.

"We were able to improve our factory costs in Germany by an average 20% last year alone," he said, describing that as "strong progress."

Blume argued that Volkswagen's products are very popular, but "we just earn too little money with them. So we must continue to reduce our costs. In all kinds of costs."