How bad is the crisis at Volkswagen?
The crisis-hit VW Group is planning drastic cuts. According to CEO Oliver Blume up to 50,000 jobs could be lost and several factories are on the brink of closure. Growing competition from China in particular is putting the group under pressure. The press sees tough times ahead.
The company hasn’t done its homework
Attributing the crisis primarily to costs in Germany is too simplistic, the Frankfurter Rundschau explains:
“German manufacturers reacted far too late to the technological paradigm shift. For too long they made a fortune from large and expensive internal combustion engines. Meanwhile, Chinese companies were building up expertise in electric motors, batteries and software. ... Now Chinese manufacturers are flooding Europe with technically sound and often cheaper electric cars. This is also the consequence of German companies failing to do their homework. ... The car industry can overcome this crisis but it will never again enjoy the dominant position of previous decades. China has become too strong for that.”
The air is getting thinner
Der Standard paints a bleak picture:
“The profits of Germany's largest corporation and employer have shrunk to almost zero in China. US President Donald Trump has imposed tariffs that are costing the company billions. And more and more Chinese manufacturers are gaining a foothold in Europe as the Germans stand by and watch. Then there are the high costs of introducing new technologies and of factories operating below capacity. Even if VW is still the market leader by a large margin in Europe, the air is getting thinner and thinner.”
The trend is unstoppable
Reflex looks back and ahead:
“When the production line for the Volkswagen Santana began operating in Shanghai in October 1985, it was hailed as an unprecedented event both in China and in the West. Western technology was transferred to the Far East, and the Chinese learnt to produce cars to high standards. ... Today, China is the world’s largest car manufacturer. ... Chinese car manufacturers currently hold a market share of around eleven per cent of the European new car market. For hybrid vehicles, this share will soon reach twenty per cent. Sales figures for Chinese cars are rising steadily, and nothing seems capable of halting this trend.”
Germany must not suffer same fate as VW
Der Tagesspiegel sees the crisis at the VW Group as reflecting the dilemma the entire country faces:
“What Germany and the Wolfsburg-based car manufacturer have in common is that they both saw the problems coming years ago but have been too slow to change course. ... This may be the last chance to show that Germany does not have to go down the same path as VW. The era of painless compromises is over. If the bid to overhaul the pension, care and tax systems for future generations – and keep the German economy competitive in the long term – fails, there will be political consequences. The challenges would remain, but it would probably no longer be the democratic parties that have to solve them. Then Germany would have real problems. And VW would be the least of them.”