VW Will Not Close Plants in Europe Despite Overcapacity image

VW said that it does not plan to close any of its European plants, despite the fact that auto industry there fights with overcapacity and the situation worsens.

VW Chief executive Martin Winterkorn said that he is aware of the fact that auto industry in Europe is struggling with the debt crisis and that some countries here have seen sales fallen to levels not seen in more than 30 years. He estimated that overall capacity on the continent would be 3 million a year more than needed.

” What other competitors are doing with this excess capacity, I don’t know. I can only tell you that we are not reducing capacity at the moment. We’re not cutting back, ” he said.

VW reported for the first time sales above 9 million for 2012, an increase of 11% compared with 2011. Winterkorn said that the automaker will try to keep its plants working at full capacity, but that it isn’t sure it will manage to keep all its 15,000 temporary workers. VW’s refusal to close plants in Europe, contrasts with the decision taken by other automakers such as Ford, which announced two plants closures in the UK and one in Belgium, GM and PSA Peugeot Citroen JV , which also announced they will close two important plants.