The German car manufacturer, Volkswagen, has for the first time in its 87-year history acknowledged the possibility of closing factories in Germany as part of a cost-cutting plan to address an “extremely tense situation”, aiming to save ten billion euros by 2026.
VW’s decision could potentially affect a vehicle production unit and a components factory in Germany, according to the company’s workers’ council.
“The economic environment has worsened, and new competitors are entering Europe. Germany is losing competitiveness. As a company, we have to act,” stated Volkswagen’s CEO, Oliver Blume, in a statement quoted by “Bloomberg.”
If the measure to close factories in Germany is confirmed, VW risks facing intense opposition from industry unions.
It is worth noting that part of the difficulties currently facing the automotive sector is centered around the transition to electric mobility and the increasing pressure from Chinese electric vehicle manufacturers, who have lower costs and higher profit margins than their European and North American counterparts.
Additionally, the recent decline in global electric vehicle sales is also putting pressure on the automotive sector.
