VOLKSWAGEN is seriously considering a drastic business move, relocating its entire car production out of Germany.

Gas is to blame for everything, or rather the gas shortage caused by the current political situation in which the war in Ukraine continues, and sanctions against Russia have never been stricter. If this scenario spills over into next year, Volkswagen could easily make such a drastic move. 

Relocating production from the home country is just one of the solutions currently being discussed in Wolfsburg. If such a decision is made, Volkswagen would move all production from Eastern Europe and Germany to factories in the west, primarily to Belgium, Portugal and Spain, Bloomberg has learned.

Russia and Nord Stream 1 are the main source of gas for German industry, or rather they were until the Russians turned off the valve. Industry is already bearing certain consequences. It is estimated that the most serious problems will surface if gas does not start flowing by June next year, Volkswagen says. 

“As a medium-term solution, we are focused on greater localization, relocation of production or technological alternatives, in line with established practice applied to challenges related to the shortage of semiconductors, as well as in the case of other supply problems.”

Volkswagen claims that it will be able to maintain production over the next six months, but on the condition that Germany continues to fill its reserves, which are now at 90 percent. As it is possible that reserves will decrease in winter, Volkswagen is already working on reducing gas consumption in line with the German government's requirement for a 20 percent reduction. 

Bloomberg emphasizes that Volkswagen is concerned about rising energy prices, which suppliers are finding increasingly difficult to cope with. Therefore, there is a danger that numerous suppliers will be forced to stop production. 

Source: index.hr