Volkswagen Group is reportedly contemplating significant cost-cutting measures, including the potential closure of two factories in Germany, marking a historic move since the company’s founding in 1937. According to reports, the facilities under review are located in Dresden and Osnabruck.
The Osnabruck plant currently produces the Porsche 718 Boxster and Cayman, both of which are set to be phased out soon. However, the facility also manufactures the Volkswagen T-Roc Cabriolet, Europe’s most popular convertible. The Dresden factory, much smaller in scale and opened in 2002, initially produced the Phaeton model and now assembles the VW ID.3 EV.
In addition to the factory closures, Volkswagen’s work safety program, which has prevented layoffs since its implementation in 1994, is also being reviewed. CEO Thomas Schäfer described the situation as “extremely tense” and acknowledged that simple cost-cutting strategies would not suffice to resolve the issues.
This cost-cutting initiative follows a downturn in the electric vehicle (EV) market. Through the first half of 2024, Volkswagen reported a 15.2% decline in EV sales in Europe and a 15.4% drop in the US, highlighting the growing challenges faced by the automaker as it navigates the shift towards an all-electric future.
