Khaberni - The German automotive giant "Volkswagen" intends to significantly reduce its production capacity in light of difficult market conditions.
The group's CEO "Oliver Blume" said in statements to "Manager Magazine": "We are currently considering an additional reduction of up to one million production units, to keep pace with the global market situation... This will shift us from a total production capacity exceeding 12 million vehicles to a sustainable level of about 9 million vehicles annually," explaining that this would include the company’s locations worldwide.
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"Volkswagen" has already reduced its production capabilities in China, as well as in Europe - particularly for the core brand of passenger cars "Volkswagen" and its subsidiary "Audi" - by one million vehicles in each.
Blume said: "The excess production capacity is unsustainable in the long run for our company... In light of current market conditions and competition, previous production plans are no longer realistic," noting that no decision has yet been made regarding the closure of factories as a result.
Blume added: "There are smarter ways than directly closing a factory. For example, in Osnabrück next year we will end production of Volkswagen vehicles - and we made this decision in 2024," explaining that the company is in talks with companies in the defense industry sector to possibly transfer production to them and accommodate the workers, although no final agreement has been reached yet.
Blume said: "We have a clear plan to reduce production capacity in a way that considers social aspects," referring to ongoing job cuts.
"Volkswagen" is currently reducing about 50,000 jobs in Germany for the basic brand and subsidiaries, particularly "Audi" and "Porsche," in order to reduce costs.
Blume indicated that the current profit level is insufficient to finance investments in models and technologies in the long term, and he did not rule out further job cuts, saying: "It is our duty to examine everything carefully. We are reviewing all cost items, and this is an essential part of our responsibility towards the company."
Blume pointed out that "Volkswagen" factories were designed in 2019 to produce 12 million vehicles annually, "but since the coronavirus pandemic, the average is about 9 million vehicles in markets that have completely changed."
In the United States, "Volkswagen" is considering the possibility of using the "Audi" company for the new plant under construction for the electric brand "Scoot," although the decision has not yet been finalized, according to "Blume".
