VW- World’s Biggest Carmaker To Suspend Production In Europe

The spread of the deadly coronavirus pandemic across Europe is forcing Volkswagen to suspend production across the continent.

Production work at its plants in Spain, Setubal in Portugal and Bratislava in Slovakia will be suspended before the current weekend, said the German carmaking giant on Tuesday. Production will also be halted at the company’s factories in Italy where the company makes Lamborghini super cars and Ducati motorcycles.

Volkswagen CEO Herbert Diess told reporters on Tuesday that preparations to suspend production are also being taken by most of the other German and European plants of the group. The suspension will probably last for a couple of weeks.

“Given the present significant deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants, production is to be suspended in the near future at factories operated by group brands,” said Diess.

In 2019, 10.8 million vehicles were delivered by the German company which owns brands including Skoda, Audi, Porsche and Bugatti. That was more than vehicles delivered by any other auto maker. Germany accounts for about 44 per cent of the total workforce of 668,000 employees of the group. Volkswagen is one of the most important companies in the manufacturing industry in Germany.

Other auto giants too announced temporary closure of production facilities across Europe. Announcement of temporary closure of 35 manufacturing facilities in total across Europe was announced by Fiat Chrysler, Peugeot owner PSA Group and Renault on Monday. This was prompted by imposition of severe restrictions on travel and public life by regional and national authorities in Europe.

It was halting operations at two plants in France and Portugal, announced Toyota, the world’s second biggest carmaker after Volkswagen, on Tuesday.

The impact of the coronavirus pandemic on the global auto industry is reflected in the closure of car plants in Europe. Extended closure of factories in China and a steep drop in the sale of vehicles in the country – the largest in the world, has been cause already by the pandemic. According to the European Automobile Manufacturers Association, with the auto industry provides direct and indirect employment to nearly 14 million people, it is one of the most important manufacturing industries in Europe.

Just two of all of its production units in China have reopened and online, Volkswagen said on Tuesday. The German car maker – as was all other companies with production units in China, was forced to close down its plants in the country because of the harsh restrictions on travel and business activity imposed by Chinese authorities since January because of the outbreak and the very fast spreading of the coronavirus there.

The outlook for Volkswagen was however still uncertain. The company is unsure about “how severely or for how long” the coronavirus would continue to impact the company which makes it “almost impossible to make a reliable forecast”, said Volkswagen chief financial officer Frank Witter on Tuesday.

(Adapted from CNN.com)

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