The drop in new vehicle sales since Covid in Europe represents a “shortage of around 500,000 cars, the equivalent of around two factories”, the financial director of the Volkswagen group indicated at a general meeting.
Volkswagen on Wednesday defended the unprecedented austerity drive being prepared at the group, with possible plant closures, saying that falling sales left Europe’s largest carmaker with around two factories too many.
A European market not yet recovered from Covid
Car sales in Europe are far from having recovered to their pre-Covid-19 level, with a deficit of around two million units, Arno Antlitz, the group’s financial director, stressed during a stormy general meeting of employees in Wolfsburg, the birthplace of the German giant.
For Volkswagen, which holds almost a quarter of the market share in Europe, this represents a “shortage of around 500,000 cars, the equivalent of around two factories”, he continued, according to extracts of his speech sent to the press.
In 2019, new car sales peaked at 15.3 million units in Europe (EU + UK), compared to 12.8 million units last year, a difference of 19%.
One to two years “to get things back on track”
“We need to increase productivity and reduce costs. We still have a year, maybe two, to get things back on track,” he said, although the details of the savings plan are not yet known.
Several thousand employees, often in overalls, greeted the speeches by the group’s management with whistles and banners, according to television images.
Volkswagen announced this week that it is considering an unprecedented cost-cutting plan in the company’s history, with factory closures in Germany and mass layoffs, sending shockwaves through Europe’s largest economy, of which the company is one of its flagships.
German group’s union mobilized
A showdown is looming with the group’s union, one of the most powerful in the country.
Daniela Cavallo, VW’s top employee representative and member of the supervisory board, warned that the group’s management will have to “face fierce resistance from the workforce.”
“With me, as chair of the central works council and the group works council, there will be no factory closures in our country,” she insisted while addressing employees at this meeting.
The group “is not in difficulty because of its German sites and the costs of German personnel”, declared Daniela Cavallo, but because “the board of directors is not doing its job”, she denounced, criticizing the choices of the management to lead the essential transition towards electric.
Julien Bonnet, with Reuters
