Why VW’s Factory Closures Are Just the Beginning

Whats happened to VW - particulary in relation to China - does this spell the end of VW in China, and what does it mean for other legacy brands? Also, what could VW do to fix it?

Follow me on Twitter @ElliotChina

[DailyBeatings]

VW, along with Mercedes, had their chance to partner with local companies and export the IP to Germany, but they made a fatal error that tariffs and sanctions can't fix...

[BillyNoMate]

This is the Nokia, Blackberry moment.

[connclissmann]

Having worked with larger German companies, I do not believe they can move as fast as you describe is needed. Not being defeatist, just based on experience. I wish they could change as it is an esteemed brand. Their products are now far too expensive.

[Streamerabi]

The problem is.. they've just become way too expensive for what they deliver, also here in Germany :( I'm pretty sure they can't affort to be competitive, without making significant structural changes

[stickynorth]

VW's wounds are entirely self created...

[MetaView]

It wasn't that long ago GM sold more Buicks and Cadillacs in China than in USA. In the blink of an eye, GM China is going bankrupt. That's how fast things can change in China.

[edwardkon]

Elliot, the fact that VW got rid of its ceo Herbert Diess means that they have kicked the can down the road. The days of reckoning have finally arrived for VW.

[krassidimitrov]

Im been working in the automotive industry in Germany as a contractor. Guys with VW permy works max 37h|weekly. Friday afternoon offices are desert. Everyone is prioritizing private life. Huge huge salaries and bonuses. They must change mentality and work hard and decide fast. Even remote working is like a dream there.. still thinking like 20y ago!

[knuth.nyhagen]

Very well spoken! It's sad to see how Europe is struggling - and keep telling there is not enough demand for EV's. It's a lie. In Norway we just passed 94% of EV's of the total car sales.

[martijnkosters]

Clear message. Finally someone mentions that it is not 'a stalling EV market' but really just a manufacturer making mediocre products.

[gslaw]

problem with VW is that it's too expensive... that's all.

[darrencox]

No doubt the German tax payer will be forced to bail them out!

[javelinXH]

VW don’t have an electric equivalent of the Up or Polo at a decent price. What we want is a smaller car in the £20k to £30k range. If manufacturers can’t do that, it’s a problem, as most people can’t afford to go above that price.

[WuJiZhang-wcmc]

In China, fast pace technology win over traditional slower pace of innovation
In China progressive over conservative
In the west, conservative over progressive
In China, conservative were seen as regressive (moving backward)

[johnnyonline]

VW's lack of urgency on EV's has been driving me crazy for years. My last 2 cars before we went electric were VW's (Polo and Jetta) and I was planning to drive an electric Golf at some point. But as of September 2024 VW have yet to launch a single EV into the Australian car market. That's insane. Every time I see a local review of the ID Buzz or ID 3 or whatever VW are always planning to launch next month. It's always next month. What are they waiting for? Just launch one, learn, innovate and launch another. There should be an electric Beetle. Why isn't there an electric Beetle?

[WingPoyLeong]

GREED IS THE REASON... REMEMBER THE WORLD FAMOUS VW DIESEL GATE SCANDAL? THEY HAD THEIR DAYS.

[marcoshenz]

Brazilian here. I would happily buy an ID1, if it existed. Instead, VWbr sits on their asses and all they do is lame compact suvs. There are not even hybrids.
I drive a 15 VW Up. Asap putting an order on a BYD Seagull...

[LeicesterMike]

Structurally VW are dead, the German way of working on design and build is just not suited to this challenge.

[MightySteve]

Great analysis of VW's problem but it doesn't help if the company owes $192 billion in debt. The company may go into Liquidation.

[steveknight]

Another problem that exists with the traditional car maker/dealer setup is that a car dealer relies quite a lot on after-sales stuff - servicing the cars, which is quite a lucrative business for them. With EVs, there is less servicing required. So much of their income will disappear if they sell an EV - so the prefer to sell ICE cars and discourage buyers from opting for an EV. Then you have all the parts manufacturers. What are the likes of AC Delco going to make for EVs that will replace their ICE parts market, for instance. No clutches, flywheels, gearbox rebuilds, engine rebuilds, lubricating oils, clutch fluids, spark plugs, Diesel injectors etc.