Volkswagen has announced plans for the idling of its plants in Europe following the continued spread of the coronavirus in the region. The German automaker stated on Tuesday that it is already preparing to temporarily shut down its plants to protect its workers and to aid in the halting of the epidemic's spread.
The first batch of factories will be idled this week, starting with the company's production facilities in Spain, Portugal, and Slovakia. This will then be followed by the temporary idling of its Lamborghini supercar manufacturing plants and Ducati motorcycle factories in Italy.
Volkswagen CEO Robert Diess revealed to reporters on Tuesday that the majority of their manufacturing plants in Europe will be suspended within the next two weeks. He explained that the significant sales decline and the uncertainties involving their supply of parts were also part of the reason for their decision.
All factories producing the German group's Volkswagen-branded vehicles will be shut down starting on Thursday this week. This will include its manufacturing plant in Wolfsburg, which is one of the world's largest automotive manufacturing facilities. The idling of plants that produce the group's other brands such as Audi, Porsche, Bugatti, and Skoda will then follow suit.
The production shut down in Europe will likely put a big dent on the chances of the company being able to beat its sales record last year. In 2019, Volkswagen was able to sell around 10.8 million vehicles globally, making it the largest automotive company in the world based on sales.
The world's second-largest carmaker, Toyota, also made a similar announcement on Tuesday. The Japanese firm revealed that two of its plants in France and Portugal will immediately be shut down.
Toyota and Volkswagen's decision to idle their European plants follows the move made earlier in the week by other automakers as the viral epidemic continues to wreak havoc on the industry. Renault, the PSA Group, and Fiat Chrysler all announced on Monday that they will be closing their respective manufacturing facilities in Europe. Combined, the three companies will be closing 35 facilities amid the severe restrictions and strict lockdowns imposed by European officials.
According to the European Automobile Manufacturers Association, the shutdown of automotive manufacturing plants in Europe could affect more than 14 million jobs in the region, including those directly and indirectly employed by automotive companies. The shut down could also heavily affect the region's manufacturing industry, which greatly depends on the auto sector. This will in turn place a heavy burden on the overall European economy, which is already on the brink of a recession.
