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According to several media reports, Volkswagen plans to reduce production shifts at its Wolfsburg plant in January 2023. A Volkswagen spokesman said that from January 9 to January 27,2023, late shift production of Golf models on Assembly Line 3 and other adjacent areas of the plant will be affected, which also means that the plant may face another capacity decline, according to reports that the body shop, paint shop and other adjacent areas will be affected proportionally, while the maintenance required for storage areas and factories will not be affected.

Volkswagen Wolfsburg Headquarters

As for why the Wolfsburg plant production shift was reduced, Business Insider media quoted internal communication between Volkswagen and employees as saying that the main reason for the reduction in production shifts was the impact of supply chain chaos caused by the New Crown epidemic and the Russian-Ukrainian conflict. In response to the above news, Volkswagen officials have not responded.

Volkswagen Group's Wolfsburg plant in Germany employs 60,000 people and produces internal combustion engine models including Golf, Tiguan and Touran. For the annual production plan, on December 6, Volkswagen brand CEO Thomas Schaefer said that due to "extreme chaos" in the supply chain, Volkswagen Wolfsburg's main plant produces well below 400,000 vehicles a year, less than half of its capacity. The supplier cancelled the shipment with only one night's notice, and the chip increased the price by 800%, which was a disaster for the company. Regarding the Trinity electric sedan, Volkswagen will decide by the end of January or early February whether it needs to build a new factory to produce the model, Schaefer said, if the new factory is built, by the time the new factory is completed, the production of some internal combustion engine vehicles at Volkswagen Wolfsburg may have ended and made room for the Trinity model.

It should be noted that the following day, Volkswagen announced that by the beginning of 2025, Volkswagen will invest 460 million euros (about 3.387 billion yuan) in Wolfsburg, Germany, most of which will be used to produce ID.3 electric vehicles. According to the expected plan, the factory will start partial production of ID.3 models in 2023 and full production in 2024. After ID.3 is fully operational, the plant will also produce another all-electric SUV model based on the MEB platform.

In fact, affected by the outbreak of New Crown Pneumonia and the conflict between Russia and Ukraine, it has become normal for many automobile enterprises to be unable to deliver new cars, and the pick-up cycle of some popular models takes months or even years to calculate. Take Volkswagen as an example. The output of Volkswagen Wolfsburg plant in 2015 was about 800,000 vehicles. However, due to the supply chain chaos caused by factors such as chip shortage and epidemic situation, the capacity utilization rate of Volkswagen Wolfsburg plant has been relatively low in recent years, and the output of the factory has been declining continuously. Data show that the factory was originally planned to produce 820,000 new cars in 2020, but the final output was less than 500,000; in 2021, production fell to 300,000, the lowest level since 1958 and far below the average production before the pandemic.

In fact, in addition to Volkswagen, including Toyota, Honda and other car companies also face the same problem. On December 22, Honda Motor announced on its official website that its factory in Saitama Prefecture, north of Tokyo, would cut production by about 20% in December 2022 and mid-January 2023 respectively, due to the same shortage of semiconductor and other components, the spread of Xinguan epidemic and logistics stagnation, while Toyota also frequently adjusted its production schedule during the year. Toyota Motor has lowered its capacity target of 9.7 million vehicles for fiscal year 2022 (April 2022-March 2023) to 9.2 million vehicles.

According to the analysis of the production situation of some automobile enterprises this year, after entering 2022, the problem of supply chain chaos has indeed improved, but it still affects the progress of global automobile production of some automobile enterprises. According to the latest data from AutoForecast Solutions ("AFS"), an automotive industry data forecasting company, as of December 18, the global auto market has reduced production by about 4,414,200 vehicles due to chip shortages this year, which is expected to climb to 4,548,600 by the end of the year. At present, the automotive industry is still in a state of shortage of key components, and industry insiders expect that the supply chain chaos will continue in the short term and is expected to ease by next year.

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