Volkswagen Group announced yesterday that average utilization at its Chinese plants will decrease as overall production capacity will increase due to new factories being opened in the world’s biggest auto market,
The German carmaker denied a report from the weekly magazine Wirtschaftswoche that its capacity utilization at its 20 cars and auto parts factories in China is going down. The magazine, which had not given the sources for the information spread, said that the German carmaker was looking to make production cuts by 10% and that it would trim the Chinese output of key car models by 20%.
Volkswagen is relying on China for large parts of its profits. If cuts were to be made in capacity in China, that would represent a big change coming from the German carmaker, as the brand stated in March that it will increase the Chinese output to 5 million units by 2019 from a previous target set at 4 million cars by 2018.
While Volkswagen has opened plant number 20 in May in China in the southern city of Changsha, deliveries of its core brand and flagship luxury division Audi have been declining for several months due to slow demands from China, which led to VW trimming its global sales predictions.
The car manufacturer explained that by adding production capacity like the new car factory built in Changsha and also another one planned to open in 2017 in Qingdao, Volkswagen will bring the existing workload to a normal level at its factories from 300 to around 270 working days per year.
By Gabriela Florea