Europe's top carmaker, Volkswagen, has announced the possible closure of its Audi factory in Brussels due to a significant drop in demand for luxury EVs. Since investing heavily in advanced technology, Audi said its sales have fallen in 2024 even though it has it introduced new car models at lower prices.
Volkswagen said the cost of finding other uses for the plant or closing it altogether would result in a price hit of some €2.6 billion in the 2024 financial year.
The company's forecast saw returns fall from 7.5% to 6.5%; Porsche SE, also part of the VW group, followed VW's lead and lowered its forecast from €5.5 billion to €3.5 billion.
Shares in both Porsche and VW fell after the announcement of the possible plant closure.
A source close to Volkswagen warned of ceasing Audi's Q8 e-tron 2025 production because of a substantial drop in demand. That would have potential repercussions for employees at the plant.
Plant at a crossroads
The plant has been hit by long-term challenges, including difficulties restructuring its layout which have led to increased production costs.
The site also faced other unplanned expenses, including exchange rate losses caused by Volkswagen Bank Rus's deconsolidation and the closure of MAN Energy Solutions, a gas turbine company.
In the first half of 2024, VW's operating profits fell by 20%, partially caused by delivery delays at the Audi plant in Brussels. The delays were brought on by a two-week closure in February, exacerbated by component shortages.
Audi announced that the plant, which employs nearly 3,000 people, has begun a consultation process. Audi warned: "This may include ceasing operations if no alternative is found."
