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Image source: Carscoop. |
According to multiple sources, Volkswagen is planning to shut down several plants in Germany due to disappointing sales performance and profitability.
Rumors of plant closures emerged following Volkswagen’s announcement of its first-half profit report. Specifically, the automotive brand recorded a profit of approximately 11.1 billion USD in the first six months, an 11% decrease compared to the same period in 2023. Notably, profit declined while sales volume slightly increased.
“The automotive industry in Europe is facing a severe crisis,” said Oliver Blume, CEO of the Volkswagen Group, in a statement to the press.
According to Blume, a host of new competitors, particularly Chinese manufacturers, are expanding their presence in Germany, making it a hotbed of automotive industry activity. Long-established car brands are losing their competitive edge as they struggle to keep up with design trends and update their production processes.
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Volkswagen’s German plants are facing potential closure this year. Image source: Carscoop. |
Thomas Schäfer, the father of Volkswagen, affirmed that mere cost-cutting measures are insufficient to rescue the brand. This implies that Volkswagen must undergo a comprehensive restructuring, which may include plant closures in Germany.
This is not the first time the Volkswagen Group has announced plant closures. Previously, in July, the company stated its intention to shorten the production timeframe for the Audi Q8 and Q8 Sportback e-tron, followed by the closure of the Brussels plant in Germany due to significantly reduced customer demand.
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