World’s biggest carmaker Volkswagen Group will soon suspend production at factories across Europe as the Coronavirus pandemic has hit company’s sales and disrupted supply chains, the company said on Tuesday.
The carmaker, which owns twelve brands from seven European countries including the Audi, Bentley, Bugatti, Ducati, Lamborghini, Porsche, Seat and Skoda brands, said that the suspension at all European plants will come into effect from Thursday for two weeks.
Ralf Brandstatter, Chief Operation Officer of the Volkswagen Passenger Cars brand, said, “The spread of coronavirus in Europe is increasingly having an adverse impact on the demand situation.”
The company said that the move is in response to the impending rapid decline in demand on the automotive markets.
“At the same time, it is becoming increasingly difficult to supply our plants with outsourced parts. For this reason, we have decided to run production down in a coordinated way from the end of the late shift on Thursday. We are convinced that this will also be in the interests of our employees who are becoming increasingly concerned about the spread of corona.”
The company also said that the uncertainty about the virus meant it was difficult to give forecasts for its performance this year.
Initially, production facilities in Wolfsburg, Emden, Dresden, Osnabruck, Zwickau (all Germany), Bratislava in Slovakia, Pamplona in Spain and Palmela in Portugal will be affected by the move.
Besides, the auto major’s component plants at Brunswick, Chemnitz, Hanover, Kassel, Salzgitter and Sitech will also be impacted.
Volkswagen has 124 production sites across the globe, out of which of which 72 are in Europe, with 28 in Germany alone.
The company believes that 2020 is going to be a difficult year as the Coronavirus pandemic present various unknown operational and financial challenges.
(With input from agencies)