Will Volkswagen make China-developed models in Germany?
What's the story
Olaf Lies, the premier of Germany's Lower Saxony state, which is a major shareholder in Volkswagen, has proposed that the automaker should consider producing models developed in China at its German facilities. The suggestion comes amid reports of potential factory closures and massive job cuts at Volkswagen. Lies believes this move could help stabilize employment and capacity utilization at their plants while fostering innovation and development.
Employment focus
Stabilizing capacity utilization and employment
Lies stressed the importance of stabilizing employment and capacity utilization at Volkswagen's plants. He said, "If we produced vehicles here that we currently make in China, we could stabilize capacity utilization of our plants." The premier also said this move would open up opportunities for new development and innovation at their locations.
Stake details
Pressure on Volkswagen from Chinese competitors
Lower Saxony owns a 20% voting stake in Volkswagen, which is facing pressure from Chinese competitors, US import tariffs, and declining demand in Europe. These factors, which the firm has said makes its business model unsustainable, have led the company to consider a new business model. Lies had first suggested the idea of producing cars for the Chinese market in Germany after his visit to China in April.
Production shift
Porsche may move Cayenne production to Germany
Separately, Frankfurter Allgemeine Zeitung has reported that Porsche, a subsidiary of Volkswagen, is considering moving the production of its Cayenne SUV from Slovakia to its Leipzig plant in Germany. This move is also aimed at improving capacity utilization. The development comes as part of a broader trend among German automakers to reconsider their production strategies amid changing market dynamics and competition from Chinese manufacturers.