German automaker Volkswagen AG VWAGY is reportedly suspending production of certain electric vehicle models owing to a lack of strong demand.
What Happened: Volkswagen will suspend the production of ID.3 and Cupra Born electric cars for the first two weeks of October at its Zwickau and Dresden plants, Reuters reported.
The German automaker did not divulge how many employees will be affected owing to the slowdown, the report added.
Earlier this month, it was reported that the German automaker might cut jobs at Zwickau.
In 2018, Volkswagen invested over a billion dollars to upgrade the plant for EV production. However, it is now faced with weaker demand and stronger competition owing to inflation and reduced subsidies.
Why It Matters: During the company’s second-quarter earnings call in July, Volkswagen said that its production planning will rely on market demand.
“We will link our production planning very much on the demand in the market which is strong product by product. But what we won’t do is to build cars on stock and coming in the situation of a high incentive level,” CEO Oliver Blume said.
The company would watch the market and decide month by month how the production sites will work, he added.
Photo by Multitel on Shutterstock
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
