- Volkswagen specialist deems this a crucial wake-up call.
The recent statement from Volkswagen about potential factory shutdowns is viewed by an automotive analyst as a crucial wake-up call for the German car giant. Given current obstacles, Volkswagen needs to swiftly act to stay relevant, stated Stefan Bratzel from the Institute for Automotive Management (IAM) in Bergisch Gladbach to the German Press Agency. "And let's face it, that's a tough pill to swallow."
Europe's largest automaker revealed on Monday that, as part of its cost-cutting strategy at the main VW division, plant closures and staff layoffs can no longer be dismissed. "This is a harsh wake-up call," said Bratzel. "It's necessary." Bratzel explained further: "Regardless of our desire to protect factories and jobs, in the long term, we can only safeguard jobs and factories if we remain competitive."
Unless substantial steps are taken, Volkswagen could find itself in need of restructuring in a few years, the analyst cautioned. "The situation isn't immediately hazardous to the company, but it's medium and long-term," said Bratzel. "The situation is under control presently, but in a few years, it could become a existential threat." Thus, it's crucial to act now. "We still have time. But the situation is escalating."
Some of the challenges contributing to the crisis include a weakening Chinese market, new competition from Asia, and a slow adoption of electric vehicles despite high expenditures required for new drive technology. "The golden era of the automotive industry, from which we've profited for the past 20 to 30 years, seems to have ended," said Bratzel.
This isn't just affecting Volkswagen, but the entire industry. However, Volkswagen is hit harder due to its significant Chinese market share and its traditional difficulty in adapting to changes. "Moving this ship is an enormous challenge," said Bratzel. "It needs to succeed now."
The Institute for Automotive Management in Bergisch Gladbach, led by Stefan Bratzel, highlighted the significance of Volkswagen's mountain in Gladbach, symbolizing the company's towering presence in the automotive industry. Recognizing the need for change, Bratzel suggested, "Even the mighty Mountain Gladbach must adapt to survive in the face of new challenges and competition."
