Will Volkswagen soon be forced to close factories?

For the first time in its long and rich history, Volkswagen may be forced to scale back in its home country of Germany.

Volkswagen was founded in 1937 during the rise of the Nazi party in Germany. An industrial propaganda tool meant to provide everyone with a “people’s car,” a literal translation of Volkswagen. The Nazi horror was defeated, and Volkswagen survived to become a global reference manufacturer. But for the first time in 87 years of history, the manufacturer is considering closing factories in Germany. This is a significant decision as it seeks to intensify cost reductions in a context of increasing competition with Chinese electric vehicle manufacturers.

As of now, it is just a hypothesis, but it is the first time the German manufacturer has officially mentioned it and is already planning job protection measures. For the record, Volkswagen employs nearly 683,000 people worldwide, including about 295,000 in Germany, according to its latest activity report. We have far surpassed the stage of smoke without fire…

A feeling of helplessness

Volkswagen, which launched a vast cost-cutting plan of 10 billion euros at the end of last year, is losing market share in China, its largest hunting ground. In the first half of the year, deliveries to Chinese customers fell by 7% compared to the same period in 2023. The group’s operating profit dropped by 11.4% to 10.1 billion euros.

Worse, Volkswagen is now challenged on its home turf by Chinese manufacturers. BYD has even taken a decisive step by acquiring its main distributor in Germany. A way to take control of all stages, from manufacturing to after-sales service. A model that once led to Volkswagen’s success…

READ ALSO: Volkswagen revives K2000