It’s been a long time since the pandemic, and demand for cars in Europe has not recovered. Car deliveries in the region are about 2 million fewer than they were at their peak, according to Chief Financial Officer Arno Antlitz, who met with employees at the company’s main factory in Wolfsburg, Bloomberg reported.
Antlitz stated that Volkswagen’s sales fell by around 500,000 cars, which is equivalent to around two plants“We need to increase productivity and reduce costs,” Antlitz said.
Plan to close two VW plants
Europe’s largest carmaker announced this week that is considering closing plants in GermanyThe move heralds a clash with powerful unions as the country’s most important industry fights for its future.
A key focus for VW is turning around its struggling passenger car brand, which has seen its profit margins squeezed by a slow transition to electric vehicles and slowing consumer spending. European carmakers are also battling competition from Tesla and new entrants from China.
Volkswagen plants in Germany / Bloomberg
Labor costs are not everything
According to a spokesman for the company’s works council, at Wednesday’s meeting in and around the huge halls of Volkswagen’s main factory in Wolfsburg At least 16 thousand employees gathered.
VW still needs to achieve 3 billion euros in cost savings to reach the 10 billion euros efficiency programme agreed last year. But Daniela Cavallo, VW’s chief employee representative and supervisory board member, believes labour costs make up only a fraction of that gap.
“Volkswagen is not sick because of its German plants and German personnel costs” — Cavallo said in her speech. “Volkswagen’s problem is that the board is not doing its job” he said, adding that he would fight any factory closure.
Falling margin
Last year, Volkswagen produced around 9 million vehiclescompared with a total production capacity of 14 million aura. Increasing returns for the core VW brand has become more difficult due to higher logistics, energy and labor costs. Margin fell to 2.3 percent in the first half of the yearup from 3.8% a year ago. Workers should not suffer because of management failures, including VW’s poor performance in the U.S., Cavallo said.
