AutoBeta(AutoBeta.net)09/04 Report--

According to Xinhua News Agency and other media reports, the German carmaker Volkswagen Group said in a statement on September 2 that it was considering closing its German factory, including a large car factory and a parts factory, in order to cut expenses. Volkswagen Group's main passenger car brands are involved.

If the factory is eventually closed, it will be the first time Volkswagen has closed a factory in Germany since its inception in 87 years, and involves abandoning its commitment not to lay off staff by 2029, the report said. Oliver Blume, chief executive of Volkswagen, said: "the European car industry is facing a" very serious and serious situation ". He pointed out that the economic environment had deteriorated and spoke frankly about the competitive pressure on Volkswagen in the European market." In particular, Germany, as a manufacturing base, is lagging behind in terms of competitiveness. In this environment, Volkswagen Group, as an automobile company, must act decisively. In response to the news, foreign media said that the news was strongly criticized by trade unions, and IG Metall, Germany's top industrial federation, condemned the plan as "shaking the foundations of automakers."

Volkswagen is considering ending an employment security agreement with trade unions, according to CCTV Finance. Through the above measures, Volkswagen management hopes to save 10 billion euros in operating costs by 2026.

As of press time, in response to the above news, Volkswagen Group has not yet made it clear whether it will close the German plant.

Volkswagen Group said on July 9 that Audi was considering halting production of its flagship models Q8 e-tron and Q8 e-tron sportback ahead of time because of a sharp drop in demand for high-end electric cars, or that it would close its plant in Brussels and was forced to lower its profit margin target for this year. It is understood that the factory is Audi's first factory specializing in the production of electric cars, but Audi officials did not make a direct decision on whether to close the plant at that time.

Earlier in June, Volkswagen set up a performance program called "KI 10" for all its companies, which aims to reduce fixed and personnel costs by 20 per cent within three years. At that time, Volkswagen China responded that 20% referred to indirect labor costs, not layoffs.

Volkswagen Group made the above decision may be related to its current performance in the car market, along with the changes in the global car market, traditional car companies are generally under great pressure, Volkswagen Group is no exception.

Volkswagen Group, founded in 1938 and headquartered in Wolfsburg, Germany, is the largest car company in Europe and one of the first foreign companies to enter the Chinese auto market, according to its website. According to the latest financial report, Volkswagen Group's revenue in the first half of 2024 was 158.8 billion euros, up 1.6% from the same period last year; operating profit was 10.05 billion euros, down 11.4% from the same period last year; and operating profit margin was 6.3%. In terms of sales, Volkswagen Group sold 4.3 million vehicles in the first half of the year, down from 4.4 million in the same period. Among them, the Audi brand was 833000, down 8.2% from the same period last year; Porsche was 155900, down 6.8% from the same period last year; and the Volkswagen brand was 2.2203 million, down 0.2% from the same period last year. Volkswagen Group, the world's largest single market, sold 1.345 million vehicles in China, down 7.4% from a year earlier, accounting for 30.9% of Volkswagen Group's total sales.

As the earliest and heavily invested Volkswagen Group, although it maintains a firm attitude towards pure electric transformation, like most traditional car companies, Volkswagen Group is also facing the pains of electrified transformation. Now that the auto market is undergoing an unprecedented reshuffle, the current task for Volkswagen Group is not only to accelerate the transformation of new energy, but also to stabilize the base of fuel-fueled cars.

According to the plan, Volkswagen Group plans to launch 30 locally produced fuel and hybrid models in 2027, and Volkswagen China will provide at least 30 pure electric models in the Chinese market by 2030. Volkswagen Group will then become the top three auto companies in China. It should be noted that with the intensification of competition in the global auto market, the time left for the transformation of Volkswagen Group may be getting shorter and shorter. As to whether Volkswagen can achieve its goals by then, the answer may be given in the near future.

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