Volkswagen suspends production in Europe as coronavirus hits sales

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Volkswagen Group is suspending production at factories throughout Europe as the coronavirus pandemic hits sales and disrupts supply chains, the company stated.

The German automaker, which owns brands such as Audi, Bentley, Bugatti, Ducati, Lamborghini, Porsche, Seat and Skoda, also stated that uncertainty about the fallout from the virus meant it was impossible to provide forecasts for its performance this year.

“Given the present major deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants, production is to be suspended in the near future at factories operated by group brands,” CEO Herbert Diess said on Tuesday.

Volkswagen’s powerful works council concluded it was impossible for employees to maintain a safe distance from each other to avoid contagion and recommended a suspension of production at its plants from Friday.

Production will be stopped at VW’s Spanish plants, in Setubal in Portugal, Bratislava in Slovakia and at the Lamborghini and Ducati plants in Italy prior to the end of this week, Diess said.

Majority of its other German and European factories will get ready to suspend production, probably for two to three weeks, whereas Audi said separately it would stop output at its plants located in Belgium, Germany, Hungary and Mexico.

The automaker’s vast factory in Puebla, Mexico, and plants in Brazil and the United States were not affected however that would depend on how the coronavirus spreads, the automaker said.

Volkswagen has 124 production sites globally of which 72 are in Europe, with 28 of them in Germany.

“2020 will be a very difficult year. The coronavirus pandemic presents us with unknown operational and financial challenges. At the same time, there are concerns about sustained economic impacts,” Diess added.

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