Volkswagen closes its first factory in Germany in its 88-year history
German car giant Volkswagen is about to make history as it prepares to close a manufacturing facility in Germany for the first time in its 88-year history. Starting tomorrow, the company will completely stop car production at its plant in Dresden, the capital of the federal state of Saxony. The decision to close is seen as a result of the multifaceted pressures Volkswagen has faced in recent years. Intense competition from Chinese manufacturers, weakening demand in the European automotive market, and a slower-than-expected transition to electric vehicles have led to a deterioration in the company's financial and operating balance. In this context, Volkswagen reached an agreement with its factory board and trade unions in 2024 on a restructuring plan in Germany that included layoffs affecting approximately 35,000 employees and production capacity reductions. According to this agreement, production at the Dresden plant was to be discontinued by the end of 2024. With the production shutdown tomorrow, Volkswagen will completely close its factory in Germany for the first time in its history. The closure of the Dresden plant followed lower sales, especially in the Chinese market, stagnation in Europe, and export pressures caused by U.
S. tariffs. It is noted that these events have put significant pressure on Volkswagen's cash flows, while the group is also expected to finance an investment program worth about 160 billion euros over the next five years. The Dresden plant, which began production in 2002, has produced fewer than 200,000 vehicles to date. At the time of its foundation, the plant was positioned as a "flagship" demonstrating Volkswagen's technological capabilities. Initially, the Phaeton model was produced there, and then the ID.3. However, none of the models had the expected impact on the company's global sales figures. Industry observers interpret the closure of the Dresden plant as a limited but symbolic step in Volkswagen's efforts to survive structural challenges, including fierce competition from China, trade measures in the United States, high energy prices in Germany, strong bureaucracy and broad worker rights.
Author: SteelRadar Editorial Team
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