Volkswagen AG is contemplating the closure of its Audi electric vehicle factory in Brussels, Belgium, in response to declining demand for luxury electric vehicles and mounting financial pressures. This potential shutdown, which would affect around 3,000 employees, would mark the first time Volkswagen has closed a car plant in Europe.The Brussels facility, which has been producing the Audi Q8 e-tron model since 2022, has faced a sharp decline in customer orders for the electric luxury segment worldwide. Audi CEO Volker Germann stated that the company has initiated an information and consultation process with social partners to address the situation.This development comes amid broader challenges for the Volkswagen Group. The company recently lowered its 2024 operating return on sales forecast to 6.5-7% due to unplanned expenses and a 3.8% drop in second-quarter sales, primarily driven by a 20% decline in China. Audi’s sales decreased by 11.3% in the first half of the year, while the Volkswagen core brand experienced a 5.2% decline.The potential closure of the Brussels plant could result in a financial impact of up to €2.6 billion on Volkswagen’s results in 2024. Despite these challenges, some analysts view the possible closure as a ‘step in the right direction’ for addressing overcapacity issues in the European automotive industry.The situation at Audi reflects broader trends in the European electric vehicle market. While some manufacturers like BMW have seen growth in EV sales, others like Mercedes-Benz have reported significant declines. The industry is grappling with increased competition from Chinese manufacturers and the effects of recent EU tariffs on Chinese EVs.As Volkswagen considers its options, including finding alternative uses for the Brussels site, the company remains cautiously optimistic about the remainder of the year. Hildegard Wortmann, Audi’s sales chief, expects a slight increase in global deliveries for the full year 2024, citing the launch of several important models in the second half of the year.
Key points
- Volkswagen is considering closing its Audi plant in Brussels due to declining demand for luxury electric vehicles.
- The potential closure would be Volkswagen’s first car plant shutdown in Europe and could affect 3,000 employees.
- Volkswagen Group has lowered its 2024 profit forecast, with Audi sales declining by 11.
- The closure could have a €2.
- The situation reflects broader challenges in the European EV market, including competition from Chinese manufacturers.
3% in the first half of the year.
6 billion impact on Volkswagen’s 2024 financial results.
Contradictions👾While some sources indicate a general decline in EV sales for European manufacturers, others report that certain brands like BMW have seen growth in their EV segment.
