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Automotive Industry
Volkswagen Group is cutting production at German factories that build VW, Audi and Cupra battery-electric cars amid slower than expected demand for EVs.
VW’s factory in Zwickau will halt production for a week starting Oct. 6, due to weak demand for the Audi Q4 e-tron. The model is being hit by U.S. tariffs and Germany’s push to soften the European Union’s ban on new combustion-engine car sales.
Work will also be suspended at VW’s Dresden plant during the first week of the autumn holidays in October, a VW Group spokesperson said. “The company is adjusting its production schedule to the current market situation,” the spokesperson said.
VW’s Emden plant, which builds the VW ID4 and ID7 models, has cut back employee hours and is also expected to shut down factory lines for several days, Bloomberg reported.
While VW is benefiting from growing EV sales in Europe, the overall pace of growth in the region is proving slower and more uneven than initially anticipated.
The work stoppages reflect the automaker’s plans to reduce production capacity and headcount in Germany in response to rising costs, weakening European demand, and intensifying competition from Chinese automakers.
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VW management and labor leaders agreed in December to cut capacity in Germany by more than 700,000 units and reduce the workforce by 35,000 jobs by 2030. Under that agreement, jobs in Emden and Zwickau are safe.
The Zwickau plant builds the VW ID3 and Cupra Born models, which are slated to shift production to Wolfsburg within the next two to three years. Zwickau will continue to produce the Audi Q4 E-tron and will also become the site of a car recycling project.
The EV production pauses follow broader capacity cuts across VW’s factory network due to weak demand. In Hanover, output of the ID Buzz and T7 Multivan will stop for five days during autumn holidays.
VW’s Osnabrueck plant is shortening each production week by at least one day through year-end and will add a shutdown week in October as cabriolet demand remains soft, German business newspaper Frankfurter Allgemeine Zeitung reported.
The automaker is ending production of the VW T-Roc Cabriolet, Porsche Cayman and Porsche Boxster at the Osnabrueck plant and said in December said it was exploring alternative scenarios for the site’s future use.