Multiple major Western media outlets say German automaker Volkswagen is considering closing plants in its home country for the first time in its 87-year history.

Bloomberg and others reported on Monday that Volkswagen is contemplating shuttering a vehicle plant and a component factory in Germany.

The automaker is also reportedly weighing the possibility of terminating its agreement with labor unions that guarantees employment until 2029, and negotiations are expected to begin soon.

Volkswagen is facing sluggish demand for electric vehicles in Europe, where Chinese rivals are whipping up competition by selling low-priced EVs.

Volkswagen Chief Executive Oliver Blume was quoted as saying that "the economic environment became even tougher, and new competitors are entering the European market." He added that Germany "in particular as a manufacturing location is falling further behind in terms of competitiveness."

Labor unions are expected to react sharply if Volkswagen proceeds with the closures. The company's management reportedly plans to explain the situation to employees on Wednesday.