Volkswagen’s Main Plant Has Seen the Lowest Production Since 1958

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This year’s chip shortage has been devastating the car industry, causing manufacturing to slow and the availability of new cars to diminish drastically. The industry likely won’t see an end to the crisis until late next year at best, beyond 2023 at worst.
One of Volkswagen’s (VW) primary plants, located in Wolfsburg, Germany, has been hit hard by this shortage and the pandemic. According to Reuters, they’re experiencing one of their lowest output levels in over 60 years.
Car manufacturing plant with silver car body frames
Volkswagen’s Wolfsburg, Germany, plant is facing its lowest production numbers in over 60 years.

Why is the VW plant’s production so low?

The fall in production at the plant has been ongoing since last year. Supply chain issues exacerbated by the heightening pandemic caused Wolfsburg’s production to drop almost 65% below their previous yearly average.
This year’s chip shortage has only made the problem worse, dropping the plant’s numbers even further. The plant also doesn’t make electric vehicles (EVs), which could be impacting the amount of demand for Wolfsburg’s vehicles as the demand for electric cars rises.
The Wolfsburg plant is a huge component of VW’s company, functioning as their largest manufacturing plant and VW’s worldwide headquarters. It’s also one of the largest manufacturing plants in the world.
Though producing electric cars could influence production levels, without a dramatic boost in semiconductor chip numbers, it’s unlikely Wolfsburg will get back to their pre-COVID numbers soon.

How low are Wolfsburg’s numbers?

Before the pandemic, VW’s Wolfsburg plant was putting out an average of 780,000 vehicles a year in the last decade. They had aimed even higher for last year before COVID-19 upended them. Wolfsburg is VW’s main manufacturing plant, making popular VW models like the Golf and the Tiguan as well as making cars for an offshoot brand called SEAT.
In 2020, the plant only managed to manufacture under 500,000 cars, a dramatic drop from previous years. However, Wolfsburg’s figures have gone down even more in the last year, making just 300,000 vehicles. This will be the lowest production number at the plant since 1958 and is extremely low for the size of the Wolfsburg plant and VW as a company.

How will this affect employment at the plant?

VW is looking to EV production at the plant to give its employment a boost. However, any transition hiccups will directly affect employment, as Wolfsburg could potentially lose 30,000 jobs if there are delays during the shift.
VW is now questioning the competitiveness of the plant and trying to address the situation to hopefully get Wolfsburg back on track.
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