For the primary time ever, Volkswagen plans to close the doorways to a facility on its residence turf. The corporate plans to shut not one however at the very least three crops in Germany because it faces mounting stress from China. Volkswagen additionally warned mass layoffs and pay cuts are coming because it seems to chop prices.
Volkswagen plans layoffs, plant closures in Germany
It’s been nearly a 12 months since Volkswagen broke the information that it was contemplating closing its first plant in Germany in its 87-year historical past.
CEO Oliver Blume informed staff {that a} three-decade-old job safety pledge was in danger. The pledge was applied to guard VW staff and forestall layoffs by 2029.
The announcement got here as Germany’s largest automaker’s market share and earnings slipped in Europe. A 12 months later, the scenario has worsened.
The corporate is now warning that a number of German crops are susceptible to closing. As well as, Volkswagen mentioned mass layoffs and pay cuts are coming in its residence market.
Daniela Cavallo, head of Volkswagen’s works council (by way of FT), introduced the corporate plans to shut at the very least three German crops, minimize 1000’s of jobs, and slash pay by 10%. Based on a spokesperson from the work council, the at-risk crops embrace the ten that primarily provide VW model autos.
Though Cavallo didn’t specify which crops are in danger, an Automotive Information Europe report earlier this month instructed VW’s state-of-the-art Audiu plant in Brussels, the place the Q8 E-Tron is constructed, was deemed primarily nugatory amid falling demand.
Mounting stress from low-cost EVs
Like its German rivals, Volkswagen is dealing with mounting stress from low-cost Chinese language automakers like BYD.
After dominating its residence market, BYD is trying to maintain progress abroad in key markets like Europe, Southeast Asia, and Latin America.
BYD is already squeezing VW and different international automakers out of its residence market with ultra-affordable electrical fashions, like its Seagull EV, which begins at below $10,000 (69,900 yuan) in China.
With new fashions, just like the mid-size Sealion 7 electrical SUV, launching in Europe, BYD continues difficult legacy automakers on their residence turf.
With market share slipping at residence and overseas, VW is dealing with falling earnings, forcing it to chop spending and shrink its in depth manufacturing community to regain competitiveness.
Volkswagen’s world deliveries had been down 3% to six.52 million models by the primary 9 months of 2024.
Though VW gained market share in North (+7%) and South America (+15%), a “aggressive scenario” in China (-10%) and Western Europe (-1%) offset the expansion. In its residence market, Volkswagen’s deliveries fell 1.6%.
We’ll be taught extra about Volkswagen’s monetary scenario, with Q3 earnings due out on Wednesday. Porsche gave a glimpse after asserting that third-quarter earnings slipped 41% on Friday. The luxurious model’s deliveries are down 41% by September.
FTC: We use earnings incomes auto affiliate hyperlinks. Extra.
