Volkswagen Braces for EV Demand Slowdown in Europe
Volkswagen Group is taking steps to manage a slowdown in demand for electric vehicles (EVs) in Europe. The company is planning to shorten the working week at its plant in Osnabrück and considering temporary closure at its plant in Emden. Meanwhile, production pauses are scheduled for plants in Dresden and Zwickau in mid-October.
The German car industry is facing a challenging time. In the past year, it has shed around 51,500 jobs, with major manufacturers announcing job cuts. Volkswagen Group, one of the key players, is feeling the pinch. The company's Zwickau plant, which produces nearly half of its total BEV output, will pause production for a week in mid-October. This pause will affect six different BEV models for VW, Audi, and Cupra brands.
Industry expert Stefan Bratzel refers to the current situation as a 'polycrisis', with multiple factors contributing to the downturn. Volkswagen Group CEO Oliver Blume has also acknowledged a clear drop in demand for BEVs in Europe. Despite rising BEV sales, they are not increasing as quickly as expected, with only 16% of new cars being BEVs. This slow demand has led Volkswagen Group to pause production in two of its plants.
The slowdown in the car market and pricing pressures are also affecting automotive suppliers. Bosch, for instance, is planning to lay off 13,000 employees in Germany by 2030.
The German automotive industry is grappling with high production costs, technological transitions, and geopolitical pressures. Key stakeholders, including Volkswagen Group and Stellantis, along with their suppliers and industry leaders, are navigating these challenges to ensure the industry's sustainability. The recent production pauses and job cuts are a testament to the complex nature of these challenges.
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