Volkswagen is reportedly looking to close multiple factories in Germany as it aims to make big budget cuts.
News agency Reuters reports Volkswagen is targeting savings of €10 billion (A$16.3 billion) by 2026 amid increasing competition from Chinese carmakers, as well as its looming switch to an electric vehicle (EV) only lineup.
According to the publication, Volkswagen’s works council says the carmaker “considers one large vehicle plant and one component factory in Germany to be obsolete” – however which facilities are in the firing line are yet to be determined.
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Analysts have previously told Reuters that Volkswagen’s Osnabrück and Dresden factories are the most likely plants to be closed.
The Osnabrück factory currently produces the soon-to-be defunct Volkswagen T-Roc Cabriolet (convertible) as well as the Porsche 718 (Cayman/Boxster), with the latter model line soon going electric as production of petrol versions is beginsto wrap up.
Volkswagen’s Dresden factory – better known as the Gläserne Manufaktur or Transparent Factory – meanwhile only builds the ID.3 electric hatchback, though it was originally built to produce the Phaeton flagship, opening in 2002 to the reported cost of €186 million at the time (more than $300 million).
The state of Lower Saxony – where the Osnabrück factory is based – is not only Volkswagen’s second-largest shareholder but has also supported the carmaker’s financial review.
Volkswagen’s Transparent Factory
Reuters reports the potential closures mark a turning point for Volkswagen Group CEO Oliver Blume, who has – until now – avoided any major clashes with unions such as IG Metall.
Union representatives are due to meet with Mr Blume, Volkswagen Group CFO Arno Antlitz and Volkswagen brand boss Thomas Schäfer this week to discuss the proposed factory closures.
The report comes only a handful of months after Audi announced low sales of the Q8 e-tron – formerly known solely as e-tron – led it to consider ending production in Brussels early, however it’s understood this has not yet been approved by the Belgium government.
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