[Alpha Biz= Reporter Kim Sangjin] Volkswagen, the German automotive giant, is set to close its first-ever plant in Germany and undergo a major workforce restructuring due to worsening economic conditions, according to reports from the Wall Street Journal and CNBC on the 2nd.

Oliver Blume, CEO of Volkswagen Group, stated, "The European automotive industry is facing a severe crisis." He highlighted that the economic environment has become more challenging, new competitors are entering the European market, and Germany, as a manufacturing location, is falling behind in competitiveness.

According to German media, Volkswagen is considering shutting down at least one assembly plant and one parts plant in Germany. This would mark the first time since the company's founding in 1939 that it has closed a plant within Germany.

The decline in electric vehicle demand in Europe has impacted manufacturers like Volkswagen, which is also facing difficulties due to a reduction in market share in its most profitable market, China.

Volkswagen had initially announced in June of last year its plan to save €10 billion (approximately $14.8 billion) by 2026. However, it is now expected to increase its cost-cutting target by an additional €4 billion to €5 billion (approximately $5.9 billion to $7.4 billion).

 

 

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