Arya News - Volkswagen plans to halt production of vehicles at its Dresden plant on Tuesday, marking the first time in the company’s history that a Germany-based factory has been shuttered.
With an installed capacity to build up to 37,500 cars a year, and the flagship of VW’s EV lineup, the Dresden plant’s closure comes against the backdrop of Germany’s broader deindustrialization, which started in 2022 when Berlin rejected the Russian energy supplies propping up its manufacturing base. FT blames the closure on poor demand in Europe, weak sales in China, and 15% US tariffs on European vehicle imports. Volkswagen announced plans to “transform” the Dresden factory into an “innovation campus” earlier this month as part of a “Future Volkswagen” program, which includes plans to reduce Germany-wide vehicle output by 730k units by 2028, and slash 35k jobs “in a socially responsible manner.” German industrial leaders and Russian President Vladimir Putin warned about the consequences of cutting Europe off from Russian gas almost four years ago, with Putin saying the “suicidal” decision would undermine Europe’s global economic competitiveness.