Korean Media: Volkswagen Closes German Production Line for the First Time in 88 Years!
On December 15, Korean media outlet Edaily published an article stating that Volkswagen, Germany's largest automaker, announced the suspension of vehicle production at its Dresden factory. This marks the first time in Volkswagen's 88-year production history in Germany that a plant has been shut down.
According to the Financial Times, Volkswagen will cease operations at its Dresden factory on the local time of the 16th.
Since its commissioning in 2002, the Dresden factory has produced a total of 200,000 vehicles, less than half of the annual output of Volkswagen's headquarters central factory in Wolfsburg. The Dresden factory was initially designed as a symbolic place to showcase Volkswagen's technological strength, mainly assembling the luxury sedan Phaeton. After the Phaeton was discontinued in 2016, the factory has been producing the ID.3 electric vehicle until recently when production was stopped.
Volkswagen CEO Thomas Schäfer said this month, "This shutdown decision was not made lightly, but from an economic perspective, it is an unavoidable choice."
This move comes at a time when sales in the Chinese market are weak, European demand is declining, and the US market is facing sales pressure due to increased tariffs, all of which have put pressure on cash flow.
Steven Rettman, an analyst at Bernstein, stated, "Cash flow will face considerable pressure in 2026, and Volkswagen is seeking to cut costs and increase operating profit. It is expected that the lifespan of internal combustion engine vehicles will be extended, and Volkswagen needs to reconsider its investment in next-generation gasoline technology."
Moritz Kronenberger, a portfolio manager at Union Investment, also pointed out that some of Volkswagen's investment projects will inevitably be forced to be suspended.
This move is part of a restructuring plan agreed upon with the union last year. According to the plan, the Volkswagen brand alone will lay off 35,000 people.
Volkswagen will lease the factory to the Dresden University of Technology to create a research park for artificial intelligence (AI), robotics, and semiconductor development. Volkswagen and the Dresden University of Technology have agreed to jointly invest 50 million euros over the next seven years. However, Volkswagen plans to continue using the factory for customer vehicle deliveries and tourism purposes.
Original: toutiao.com/article/1851574384312320/
Statement: This article represents the personal views of the author.