"VW considers closing German factory for first time in 87-year history" - article

[Tooney]

Chief executive Oliver Blume said: “The economic environment has become even tougher and new players are pushing into Europe. Germany as a business location is falling further behind in terms of competitiveness.”

The Volkswagen brand, which fuels most of the carmaker’s sales, is the first of the group’s marques to undergo a cost-cutting drive. It is targeting €10bn (£8.4bn) in savings by 2026 as it attempts to streamline spending.
. . .
Volkswagen, Germany’s largest industrial employer and Europe’s top carmaker by revenue, has been stung by rising power prices after the loss of cheap Russian gas in the wake of the invasion of Ukraine.

The company has also been struggling with a faltering $200bn push into electric cars. Sales of EVs stalled in the first half of the year, while the company has delayed the US launch of its latest electric sedans indefinitely.

Earlier this year it revealed plans to invest up to $5bn in Tesla rival Rivian in an effort to catch up with its competitors.

https://www.msn.com/en-us/money/mar...for-first-time-in-87-year-history/ar-AA1pRUlg

 

[Uknown]

Interesting… I don’t see them trying all that hard to sell the Taycan. I wouldn’t buy at MSRP in this market, but my name is just on some dealer list no eta on allocations.. fine for me I am good with my MY20. There is little to no motivation by the dealer to move.

I find the experience from Porsche Dealers to be at odds with the press . But I my limited experience Porsche dealers largely seem indifferent.

 

[WasserGKuehlt]

The unending delays (ID, Macan EV), the failed experiments with Cariad, the deluge of recalls and stop-sales must have been ruinously expensive for the group; and that’s on top of the general slowdown in CN and other big markets, the cost of continuing development, cost of energy and so on.

I suspect this is a bit of hard ball to get the council to play, but it is not a good look for VAG (nor the German industry in general; https://apple.news/As2-JibtXTcCZxTeKY_p2Yg - just an opinion, and a bit myopic, but not completely wrong.)

 

[Murph7355]

....
I find the experience from Porsche Dealers to be at odds with the press . But I my limited experience Porsche dealers largely seem indifferent.

They, and German manufacturing generally, have been living in the past for a while and refusing to budge.

This has only not hit home much sooner because of their cheap energy deals which also came home to roost.

There are plenty of other markets that will always be cheaper to manufacture resource intensive product in. And the cheap ones on the European continent are effectively gone.

Unless Western electorates place very significant value on self-sufficiency/reduced dependence on regimes such as China and Russia, there's only ever one way this is going.

I hope Porsche have got a grip of their supply/demand curves, but looking at JII and EV Macan availability suggest not.

 

[DCYL725]

They, and German manufacturing generally, have been living in the past for a while and refusing to budge.

This has only not hit home much sooner because of their cheap energy deals which also came home to roost.

There are plenty of other markets that will always be cheaper to manufacture resource intensive product in. And the cheap ones on the European continent are effectively gone.

Unless Western electorates place very significant value on self-sufficiency/reduced dependence on regimes such as China and Russia, there's only ever one way this is going.

I hope Porsche have got a grip of their supply/demand curves, but looking at JII and EV Macan availability suggest not.

Porsche will have to weather through through waters in the global economy. They can and will. Cuts will be made and they may go a few years selling less cars until the Chinese demand bottoms out. No one knows when they will be.

 

[Johan Meert]

Today Audi announced that the Belgian factory that produces the Q8 etron will not be getting a new model. This effectively means closure.

 

[Brombaer1971]

This is about the Volkswagen brand, not the sister brands which are quite profitable. Volkswagen needs to offer bread and butter cars which is the biggest reason for it’s brand name. Which is quite complex, especially since batteries are external and thus price is harder to get down so those cars are affordable for the masses. Just ask Ford how hard that is. Audi/Porsche don‘t have that problem yet, with their strategy to produce the big and expensive luxury cars first, but Audi needs that as well for the smaller cars.

What we‘re seeing is the reluctance in engaging in battery technology, which is the biggest and most expensive part. And VW is a big big tanker, that takes Long to change direction, just not a sport boat.

 

[Murph7355]

... . Audi/Porsche don‘t have that problem yet, with their strategy to produce the big and expensive luxury cars first, but Audi needs that as well for the smaller cars.
..... .

Disagree.

Audi and Porsche have as big problems as VW.

Residuals are through the floor and the problems with their initial products are legion. This is really hurting them on both gens of the Taycan and now the Macan IMO.

There are plenty of things they can do about this if they want. Question is, how stuck in yesterday's mindset are they?

Shoring up residuals needs to be first for Porsche. Pushing the warranty envelope out for the batteries would be a big start. Tie it in with the whole 15yr approved programme.

Getting a bit more life on the s/w updates line would also be wise. Show that your product has legs. Will help residuals and hence help new sales. Will also make early adopters feel better about life. Computer h/w differences between J1 & JII are minimal, and sorting your shit out on how to deliver software and regression test properly will be money well spent in the long run. (Yeah yeah, people don't buy Porsche for the software. Thank God for that right now, but they damn well need to change that mindset as people will stop buying Porsche if they have poor s/w).

In concert they also need to rethink volumes. Stop dumping new stock on dealers to just build and build.

What would be really great is if they also offered a programme for core part upgradability. Want a 104kWh battery. No problem. Same size/shape pack as JII. Here you go. After 30yrs they finally latched onto that for in-car audio... Get ahead of the curve with this stuff. Differentiate yourselves.

Holding my breath on none of it.

 

[Murph7355]

... . Audi/Porsche don‘t have that problem yet, with their strategy to produce the big and expensive luxury cars first, but Audi needs that as well for the smaller cars.
..... .

Disagree.

Audi and Porsche have as big problems as VW.

Residuals are through the floor and the problems with their initial products are legion. This is really hurting them on both gens of the Taycan and now the Macan IMO.

There are plenty of things they can do about this if they want. Question is, how stuck in yesterday's mindset are they?

Shoring up residuals needs to be first for Porsche. Pushing the warranty envelope out for the batteries would be a big start. Tie it in with the whole 15yr approved programme.

Getting a bit more life on the s/w updates line would also be wise. Show that your product has legs. Will help residuals and hence help new sales. Will also make early adopters feel better about life. Computer h/w differences between J1 & JII are minimal, and sorting your shit out on how to deliver software and regression test properly will be money well spent in the long run. (Yeah yeah, people don't buy Porsche for the software. Thank God for that right now, but they damn well need to change that mindset as people will stop buying Porsche if they have poor s/w).

In concert they also need to rethink volumes. Stop dumping new stock on dealers to just build and build.

What would be really great is if they also offered a programme for core part upgradability. Want a 104kWh battery. No problem. Same size/shape pack as JII. Here you go. After 30yrs they finally latched onto that for in-car audio... Get ahead of the curve with this stuff. Differentiate yourselves.

Holding my breath on none of it.

 

[andb]

This is about the Volkswagen brand, not the sister brands which are quite profitable. Volkswagen needs to offer bread and butter cars which is the biggest reason for it’s brand name. Which is quite complex, especially since batteries are external and thus price is harder to get down so those cars are affordable for the masses.

Its no surprise that people don't buy even their gas cars. VW went through heavy cost cutting to put more money into shareholders pockets, without investments cars look cheaper now and software sucks. The new nicely optioned Tiguan is not worth the price. I drove one recently and a LynkCo 01 right after and to my surprise the Lynk was a better car, it was more comfortable, less road noise and better NVH overall.

 

[Fish Fingers]

The Chinese are coming.
Slowly, but surely - just like the tide coming in.
Today's press.....

https://www.bbc.com/news/articles/c74jgk1kw87o

I see them challenging the bread and butter brands, like VW.
But they are far more efficient.

These new cars have to take somebody's market share.

It may already be too late for VW imo. Their current range has little appeal (from someone who owned 7 Golf's over the years).

I think Porsche is a different proposition though.
That logo on the bonnet is worth a lot.

 

[tigerbalm]

That logo on the bonnet is worth a lot.

Even in Turbonite?

 

[chun]

That logo on the bonnet is worth a lot.

Is it though? To me growing up Porsche logo ment: the affordable understated performance.

Now?
Affordable not.

Most EV around 100.000 can equal taycan's numbers. Hell, chinese ones below 40.000 can. The engineer that started the "active ride" thing at porsche is with BYD now, and many others also. So whatever Porsche can do now, chinese can and will buy it, and innovate on top of it.

So it's design... for now well bent metal into nice shapes is all they got in my mind.

For how long will that logo be worth a lot; and when will it start meaning: "that old brand, for old people, with old technology" ?

And let's not kid ourselves. All car manufactures will break their back to have a piece of the chinese / asian market, as it is MASSIVE. And they have lost almost all of it in 5 years. So clearly, in some markets, the logo is already worthless for many people.

 

[ze_shark]

Not sure what Porsche has to do with the Volkswagen brand industrial footprint issues.

Volkswagen does not even have top line issues, it is more or less flat (+2.3%) with a european market which is also more or less flat (+3.9% yoy for Jan-Jul 24). The VW group still enjoys 26.2% of marketshare in the EU, down 0.1% yoy. As such, VW Group resists better to market erosion than all other major players except Toyota: Stellantis, Renault, Hyundai, BMW, Daimler. Throw in Tesla and their 2.1% marketshare, down 0.3% yoy. Porsche EU volumes are up 15.8% yoy

Volkswagen's problem is their bottom line. I suspect that, politically, Blume has had to let the situation deteriorate enough so that he has air cover to put the industrial footprint on an unavoidable diet.

BEVs displace a lot of work content from the assembly of powertrains to cells with (I speculate) lower work content cost share (nature of the process, automation) and higher raw material share.

Electrification is going to cost a lot of assembly jobs in the automotive industry. There will be a lot of pain in this industry as the EV conversion continues.

 

[philbur]

Its no surprise that people don't buy even their gas cars. VW went through heavy cost cutting to put more money into shareholders pockets, without investments cars look cheaper now and software sucks. The new nicely optioned Tiguan is not worth the price. I drove one recently and a LynkCo 01 right after and to my surprise the Lynk was a better car, it was more comfortable, less road noise and better NVH overall.

Doing things for shareholders will always ruin a company.. it’s simple - money is the result, not the reason! We need to get back to capitalism and doing great things.