Europe’s largest economy is in trouble and Volkswagen is at the heart of the crisis. The German carmaker is facing existential challenges due to mismanagement, competition from China and the rise of electric vehicles. With announced job cuts and planned factory closures on the way, the pressure is on for Volkswagen to turn things around.
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Scooped by
Graham Watson
onto IB Business Management November 29, 2024 1:45 PM
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This Bloomberg clip looks at the challenges facing Volkswagen, not least the need for cost savings to keep the car manufacturer viable, to the extent that they're contemplating some of its German production locations.
But if it does so, does this illustrate something more fundamental about the state of the German economy, and what are the factors that have contributed to this? Electrification has played a part - although VW weren't terribly well-prepared for this and their vertical integration of the EV business hasn't worked very well, as has the rise of Chinese car manufacturer who have started to overtake the company in their home market and, increasingly the EU. Lastly, its relationships with its workers are being challenged as never before. A good case study of a firm that seems to be in decline.