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The possible closure of an Audi plant and a 3.8% drop in second-quarter sales (driven mostly by China) have put Volkswagen in a bit of a tough spot right now. From Reuters:
Deliveries in China were down by nearly 20% amid a wider decline in sales of combustion engine cars which still make up the majority of Volkswagen’s line-up in the country.
As China heads speedily to an all-electric market, Volkswagen has said it will be raising its battery-powered offerings in coming years and prioritising profitability even as rival local carmakers slash prices up by to 50%.
“We do not expect an easy year,” a spokesperson told reporters.
The company lowered its 2024 operating return on sales forecast to 6.5-7% from 7-7.5% and said the Audi brand was considering closing its Brussels site, which employs about 3,000 people, due to low demand for its higher-end electric cars.[...]Finding an alternative use for the plant or closing it, as well as other expenses, would cost up to 2.6 billion euros ($2.8 billion) this financial year, Volkswagen announced.
The future of Audi’s plant in Brussels was thrown into question earlier this year after the German automaker said the electric vehicles that would come after the Q8 E-tron would be built in Mexico.
Rising orders for newer models such as the Q6 e-tron coming to market this year had led to a sharp drop in interest in the older Q8 e-tron produced in Brussels, Audi said on Tuesday.
Audi has struggled to catch up with premium carmaker competitors BMW and Mercedes in the transition to electric vehicles.
“Products like the first generation Q8 e-tron were halfway solutions - not the full clean sheet like Audi has done with its new premium electric platform,” said Stephen Reitman of Bernstein Research. “The potential of the Q6 is higher.”
Audi has promised a refresh in 2024 and 2025 with over 20 new EV and combustion engine models, followed by EV-only models from 2026.
If this plant closes, it would be the first VW plant to be shuttered in 40 years.
A version of this article originally appeared on Jalopnik’s The Morning Shift.