VW Will Not Close Plants in Europe image

VW CEO Martin Winterkorn announced that the automaker does not plan to close any plant in Europe, despite the stagnating market.

VW CEO Martin Winterkorn told Austrian broadcaster ORF that the automaker expects further growth in South America, the US, China and Russia, but sales in Europe will stagnate this year. Despite this gloomy forecast Volkswagen said it is committed to its facilities in the European market.

“No, we won’t be withdrawing capacity in Europe, but rather preserving capacity,” Mr. Winterkorn said.

He also added that VW plans to build 10 new plants globally, seven of them located in China. Still, Winterkorn said that the automaker might consider workforce reductions aimed at both temporary and permanent staff.

Earlier this month VW said that worldwide sales slowed in March as headwinds in Germany are increasing. For March VW reported sales up 0.2% to 864,400 units, thanks to demand in the US and China which helped the automaker offset shrinking sales in the European market. In January and February the German automaker delivered 1.4 million vehicles, up 8.3%.

“The data for March clearly show that the markets are becoming even more difficult,” Christian Klingler, VW’s sales chief, said in the statement.

Source: Fox Business