Volkswagen could close factories in bid to avoid wasting billions – report

Volkswagen is reportedly trying to close multiple factories in Germany because it goals to make big budget cuts.

News agency Reuters reports Volkswagen is targeting savings of €10 billion (A$16.3 billion) by 2026 amid increasing competition from Chinese carmakers, in addition to its looming switch to an electrical vehicle (EV) only lineup.

In accordance with the publication, Volkswagen’s works council says the carmaker “considers one large vehicle plant and one component factory in Germany to be obsolete” – nevertheless which facilities are within the firing line are yet to be determined.

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Analysts have previously told Reuters that Volkswagen’s Osnabrück and Dresden factories are the most definitely plants to be closed.

The Osnabrück factory currently produces the soon-to-be defunct Volkswagen T-Roc Cabriolet (convertible) in addition to the Porsche 718 (Cayman/Boxster), with the latter model line soon going electric as production of petrol versions is beginsto wrap up.

Volkswagen’s Dresden factory – higher referred to as the Gläserne Manufaktur or Transparent Factory – meanwhile only builds the ID.3 electric hatchback, though it was originally built to provide the Phaeton flagship, opening in 2002 to the reported cost of €186 million on the time (greater than $300 million).

The state of Lower Saxony – where the Osnabrück factory relies – shouldn’t be only Volkswagen’s second-largest shareholder but has also supported the carmaker’s financial review.

Reuters reports the potential closures mark a turning point for Volkswagen Group CEO Oliver Blume, who has – until now – avoided any major clashes with unions similar to IG Metall.

Union representatives are as a result of meet with Mr Blume, Volkswagen Group CFO Arno Antlitz and Volkswagen brand boss Thomas Schäfer this week to debate the proposed factory closures.

The report comes only a handful of months after Audi announced low sales of the Q8 e-tron – formerly known solely as e-tron – led it to contemplate ending production in Brussels early, nevertheless it’s understood this has not yet been approved by the Belgium government.