Struggling carmaker: VW under pressure
Europe's largest car manufacturer Volkswagen is no longer ruling out plant closures and layoffs in Germany. The company's management has warned that the cost-cutting measures taken so far may not be sufficient to prevent the company from making losses in the long term. Works councils and trade unions accuse the company of mismanagement, urging the carmaker to focus on more competitive products. Commentators discuss the roots of the problem.
Downturn despite profit increase
Kleine Zeitung examines the core of the problem:
“At 17.6 billion euros, profits in 2023 were well above 2022. Others can only dream of such a result. So where is the problem? It goes much, much deeper. VW's core brand is gradually moving into the red, return on sales has slipped below three percent to 2.3 percent, e-mobility, unleashed by and after the diesel scandal, is weakening. In China, the company's most important market, the company is suffering from a general reluctance to buy and is losing profits.”
Inefficient production
Volkswagen is being outstripped by its competitors, the Neue Zürcher Zeitung comments:
“VW also lags behind in external efficiency comparisons: while global competitor Toyota with its 380,000 employees sold 11.2 million vehicles last year, Volkswagen needed 680,000 employees to produce 9.2 million units. This is not just the result of management errors, but also the fact that with its six main factories and seven other production sites in Germany, the company incurs too many costs and has too many employees - especially at its headquarters in Wolfsburg. Then there's the problem of overcapacity, which is why there are now plans to close some factories.”
The car nation needs a new vision
VW's malaise is symptomatic of the problems facing Germany as a leading industrial nation, writes Der Spiegel:
“Labour and energy costs are higher than elsewhere in the world, even European industrial countries like Italy or France are cheaper. ... So far, it has mainly been industrial suppliers such as Continental or ZF that have announced job cuts and factory closures in this country. Now the crisis is hitting VW, the nation's biggest industrial employer, with full force. The company bosses in Wolfsburg have obviously woken up. But what about the politicians in Berlin? ... The car nation needs a vision. What direction does it want to take in the coming years? What can it still offer? The federal government also has a role to play here.”
Europe lagging behind
wPolityce points to problems in the entire sector:
“VW's problems are just one example of the general situation in Europe's automotive industry. Rising energy costs (caused, among other things, by Russia's aggression against Ukraine) are already making it difficult. Another issue is the tough competition from Asia and the US - especially in the electric car sector. Despite massive investments in restructuring their production, European companies have not been able to bring low-cost electric cars that could boost their sales onto the market. Fears that the market could be flooded by Chinese companies are so great that the EU Commission decided to impose punitive tariffs in July.”
These are the real problems
This crisis is far more worrying than the results of the German state elections, Večernji list sums up:
“The news of the economic earthquake and the negative shifts in the German automotive industry are more important than the results of individual parties in the elections. ... Germany can once again serve as an example. When we think about individual issues in Croatia such as the Yugoslav flag at the Bijelo dugme concert or the nationalist symbols at [Marko Perkovic] Thompson's concerts, we should remember that in parallel to these discussions real life continues. It would be better for everyone in Croatia and Germany if we played down the political panic and increased the economic panic.”