The Volkswagen Groupone of the largest automobile manufacturers in the world, has announced a drastic measure that marks a milestone in its recent history: the definitive closure of its plant in Brussels, Belgium, on February 28.
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This closure puts an end to more than 30 years without factory closures in Europe by the German conglomerate. The decision, described as “painful” by the company itself, leaves 3,000 workers without jobs and raises questions about the future of the automotive industry in the region.
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The announcement comes after months of uncertainty and failed negotiations. Since last July, rumors about a possible closure began to circulate after Audi, a subsidiary of Volkswagenannounced that it was considering stopping production in Brussels due to the drop in demand for the Audi Q8 e-tron, the only model assembled in these facilities.
Despite efforts to find alternatives, the lack of agreements with potential buyers and the high costs associated with the plant have sealed its fate.
An early but unexpected decision
In the summer of 2023Audi published a statement that set off alarms at its Brussels plant. In it, the company recognized that it was “considering the early end of production” in these facilities, adding that “This could also mean the complete closure of the factory if a viable solution was not found.”
Since then, the workers lived through months of tension and uncertainty, with pressure measures included, such as taking keys from 200 vehicles to demand concrete responses from management.
Audi spokesman Peter D’hoore finally confirmed what many feared: negotiations to keep the factory open did not come to fruition. According to D’hoore, Despite the efforts made, production of the Audi Q8 e-tron will cease on February 28ending plant operations.
Reasons behind the closure: much more than low demand
Although the drop in demand for the Audi Q8 e-tron, a luxury electric SUV, has been a key factor in the decision, it is not the only reason behind the closure.
According to Gerd Walker, head of production at Audi AG, the closure also responds to long-standing structural and financial challenges at the Brussels plant.
In a statement, Audi detailed some of the factory-specific problems:
- Unfavorable location: The plant is located near the center of Brussels, which complicates its expansion and adaptation to new logistical needs.
- High logistics costs: The plant’s position and its infrastructure limitations significantly increase transportation and production costs compared to other company facilities.
- Economic competitiveness: In a context where profit margins in the automotive industry are increasingly narrow, the Brussels factory has become less competitive compared to other plants in the group, which operate at lower costs.
The failed search for a buyer
In an attempt to save the plant and jobs, Volkswagen explored the possibility of selling the facilities to other manufacturers. One of the names that was considered was that of the Chinese giant NIO, known for its growing prominence in the electric vehicle market.
However, its CEO, William Li, He denied any interest in acquiring the factory.
Without a viable buyer and without production plans for another model in Brussels, Volkswagen chose to permanently close the plant, a measure that not only affects the workers, but also the local economy and the company’s image in Europe.
Impact on workers and the local community
The closure of the Audi factory in Brussels will leave 3,000 people without jobs, many of whom have worked there for decades.
Also the direct impact on workersthe closure will also affect supplier companies and the local economy, which largely depended on the plant’s operations.
Local authorities have expressed concern about the economic and social consequences of this decision. “It’s a hard blow for our community,” said a union representative, who also criticized Volkswagen for not making more efforts to keep the plant open.
A symptom of changes in the automotive industry
The closure of the Brussels plant is a reflection of the challenges facing the automotive industry in its transition to electrification.
As manufacturers face declining demand in certain segments, such as luxury electric SUVs, and pressure to reduce costs, Decisions like this could become more common.
Audi’s case is not unique. Other manufacturers, such as Fiat, have also taken similar measures, such as temporarily pausing production of the Fiat 500E at its plant in Mirafiori, Italy.
Although production is expected to resume in this case, the pattern is clear: the least efficient and most expensive plants are in the crosshairs.
The future of Volkswagen in Europe
The closure of the plant Brussels raises questions about the future of Volkswagen’s operations in Europe. Although the group remains a leader in the region, these types of decisions could affect its reputation and relationship with workers.
For now, Volkswagen seems to focus on consolidating its production in more competitive plants and accelerating its transition towards a more diverse and sustainable range of vehicles.
However, the road will not be easy, and the closure of the Brussels plant is a reminder of the structural and financial challenges facing the automotive industry in an ever-changing world.