Volkswagen Crisis Explained: Reasons for Factory Closures & Layoffs

In a surprising turn of events, Volkswagen has announced plans to close 3 out of 10 of its German factories, marking the first time in its 87-year history that production will cease on its home turf. This decision will impact thousands of jobs and could reshape the future of the German automotive industry.

In this video, I dive into the reasons behind this historic decision, breaking down VW's financial challenges in 2024, its ambitious cost-cutting goals, and the massive €4 billion savings target. We’ll discuss the ripple effects this could have on VW’s global strategy, Germany’s economy, and the automotive workforce.

Topics Covered:

Germany's automotive industry and its role in Germany's economy
Volkswagen’s production decline and revised forecasts
Economic pressures and challenges facing the German auto industry
Details on the factory closures and job cuts

Don’t miss out on this in-depth look at a major shift in the automotive world! Watch now to stay informed on how Volkswagen's moves could impact the EV and automotive industry as a whole.

Timestamps:
0:00 - Introduction
0:44 - Germany's Automotive Industry
1:09 - VW Group Overview, Production and Economic Position
1:25 - Financial Challenges & Cost Cutting Measures - VW 2024
2:00 - Why VW is Closing German Plants
4:12 - Unclear Political Situation
4:45 - Final Words

[jatigre]

They've basically watched the EV competition take over and thought: "Nah, it'll be fine!"

[Ianmundo]

That payout to shareholders will cost the company dearly

[PenkoAngelov]

And you know who is directly responsible for trying their best at pushing away costomers from buying or even considering EVs? -- Dealers!
Automotive dealerships depend on customers going back to them for service, inspections, maintenance, reapirs, and so on. They do not get much profit from selling cars. And you know what has minimal maintenance? -- EVs.
Dealerships are (unreasonably) afraid of that transition and have been viciously pushing away. customers or artificially increasing the prices of EV to try and make them unappealing.

(I have colleagues working at the local VW dealer)

[didierpuzenat]

Tesla is also producing EVs in Europe, even Germany, and makes huge benefits. My 2 cents is that you cannot succeed in such a huge transition without investing all you have. VW as many other carmakers are still investing in petrol cars in 2024, it is pure madness.

[PenkoAngelov]

Vehicle sales in Europe for September:
Market DOWN -4.2%
BEVs UP +13.9%
So it's definitely not that "EV sales are poor". It's simply the board members (the Excel Masturbators) sheer incompetence, lack of forward thinking and ignorance.
- VW is closing 3 factories while Tesla received approval for first of three expansions at their Berlin factory.
- VW is laying off people and cutting salaries, while Tesla is hieing more and rising pay.
- One of them is focused on producing IC vehicles for as long as they can, while the other is only selling EVs.
- One of them is among the best selling vehicles in Chine. While the other one lost their dominance in China.
- One of them has the best selling vehicle in Europe while not being their home market. While the other one is the second best selling at their home market.

Also... Toyota's sales are falling 1.6% per month. They also lost the Chinese market.

[JoaoSilva-ti]

Toyota seems to be doing ok. Maybe learn from them.

[Lukey-jyez]

VW have EV’s which have a better build quality than Tesla.

They made Billions, it’s just billions less than before.

All European car manufacturers have increased prices to a point Europeans don’t want to buy them.

30% tariff import costs on non-European cars, well let’s increase our cars by 30%…

If my budget five years ago allows me to buy a five series BMW, that same budget now buys me a one series BMW. I’ll just keep my five series for now, thanks and not buy a new car.