AutoBeta(AutoBeta.net)09/27 Report--

According to media reports, on September 26 local time, a Volkswagen spokesman said that due to sluggish market demand, Volkswagen's factories in Zwickau and Dresden, Germany, will stop production of Volkswagen ID.3 and Cupra Born models in the first two weeks of October. Volkswagen's Zwickau plant will cut production of new cars during the autumn holidays in Saxony from October 2 to October 13, while the Dresden plant will suspend production of the ID.3 electric model from October 2 and resume production from October 16.

In response to the above report, Volkswagen officials have not responded as of publication, and it is unclear whether the shutdown will affect the number of factory employees involved.

On September 13, media reported that Volkswagen Group is considering cutting employees at its factory in Zwickau, eastern Germany, due to sluggish demand for electric vehicles. Sources at the time said Volkswagen planned to cut some temporary contract workers at the Zwickau plant, including nearly 300 whose contracts expire at the end of October, when Volkswagen may notify them to leave and not renew them. The fate of about 2000 temporary employees remains uncertain. But the people declined to give details because no final decision had been made.

The next day, Volkswagen said it would lay off 269 employees at its Zwickau plant in Germany whose 12-month contracts were due to expire soon and would not be renewed. In addition, Volkswagen will adjust shift work at the plant. However, a Volkswagen spokesman pointed out that the group remains 100% convinced of the development path of electric vehicles, in which the Zwickau plant plays a central role.

Data show that Volkswagen Group was founded in 1938, headquartered in Wolfsburg, Germany, is Europe's largest automobile company. At present, Volkswagen produces electric vehicles in Germany, including Zwickau, Hanover, Dresden and Emden 4 factories.

In 2018, Volkswagen announced an investment of $1.29 billion to transform its Zwickau plant from an internal combustion engine to an electric vehicle, which currently produces Volkswagen ID.3, ID.4 and ID.5 as well as other Volkswagen branded electric vehicles such as the Audi Q4 e-tron and Cupra Born. In November 2019, Volkswagen ID.3 was officially commissioned at the Zwickau plant and delivered to the European market the following spring.

The Dresden plant opened in 2002 and initially produced high-end Volkswagen Phaeton sedans. It wasn't until 2017 that the plant began converting to electric cars, originally producing e-Golf. The plant ceased production of e-Golf at the end of 2020 and started production of ID.3 in 2021. Data show that 6500 ID.3 electric vehicles were produced at the Dresden plant in 2022.

It is important to note that this is not the first time Volkswagen has adjusted to low demand for trams. At the end of June, Volkswagen also cut production of two models, the electric ID.4 compact SUV and ID.7 sedan, at its plant in Emden, Lower Saxony, Germany. The main reason for the reduction in production is also weak sales of the models involved, and demand is nearly 30% lower than the original planned production.

Although Volkswagen Group is a relatively active brand in the electric transformation of many multinational automobile enterprises, compared with the current mainstream electric vehicle brands, Volkswagen's performance in the field of electric vehicles is not optimistic. Between January and May this year, Volkswagen produced 97,000 ID models in Europe, but sold only 73,000, according to the data. Tesla, by contrast, sold more than 100,000 Model Y vehicles in Europe, more than Volkswagen's total sales of all electric models.

Since 2023, Volkswagen has begun to accelerate the process of electrification, especially in the Chinese market. In April this year, Volkswagen Group announced that it would invest 1 billion euros to establish a new company in China; in May, Volkswagen Anhui announced that it would continue to invest in Hefei, Anhui Province, with a total planned investment of 23.1 billion yuan. According to the plan, by 2030, Volkswagen Group brands including Volkswagen and Audi will offer more than 30 pure electric models in China.

However, unlike in the past, competition on new energy tracks is particularly fierce today, and Volkswagen Group is now in a critical period of electric transformation, but there is not much time left for Volkswagen Group to "transform". Whether it is the shutdown of the exposed plant or the layoffs earlier this month, the reason for this result may have something to do with Volkswagen's current poor development in the auto market. Media reports say Volkswagen faces not only increasing competition from Tesla and Chinese automakers, but also weak demand for electric vehicles in Europe due to high inflation and subsidy cuts.

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