German carmaker Audi announced on Tuesday that it is considering closing its electric car factory in Brussels due to a “global drop” in demand for these high-end vehicles. The manufacturer, a subsidiary of Volkswagen, has indicated that it is considering an “early cessation of production” of its Q8 e-tron SUV models at the factory, which employs around 3,000 people. Management is discussing “solutions for the Brussels headquarters”, which “could also include a cessation of activities if no alternative is found,” the manufacturer added in a statement.
Audi cited a “general decline in customer orders in the luxury EV segment” to justify the decision. After investing heavily in electric vehicles in recent years, carmakers have been hit hard by slowing demand in the sector.
“Long-standing structural challenges” at the site
Volkswagen – whose 10 brands also include Porsche, Seat and Skoda – said closing the Brussels plant, or looking for other options for it, as well as other unforeseen costs, would have an impact of 2 billion euros ($2.8 billion) on fiscal 2024. The car giant consequently lowered its operating profit forecast for this year to 6.5-7.0%, from 7.0-7.5% previously.
Audi also cited “long-standing structural challenges” at the Brussels plant, including a factory layout that is difficult to change and high logistics costs. A consultation will be held on next steps, Audi said.
“The announcement of intent does not mean that a decision has been made,” said Volker Germann, Managing Director of Audi Brussels.
But the news was hard on employees. Audi employee representatives “are calling for a long-term perspective for the plant and for our colleagues in Brussels,” said Rita Beck, spokeswoman for the Audi committee on the VW Group’s European Works Council. “Audi management must take responsibility for the site.” She added that in the first quarter of this year, Volkswagen reported a more than 20 percent drop in profits due to lower deliveries of more expensive models, including Audis.
Source: BFM TV
