The auto giant is still contending with supply issues that have wreaked havoc with its ability to produce cars.
According to a report by Business Insider magazine, as covered by Reuters, Volkswagen's main production plant in Wolfsburg, Germany, will reduce the number of shifts in January, causing production stoppages throughout the month.
According to a company spokesperson, the stoppage will affect the body shop, the paint shop, and other adjacent areas on a pro-rata basis. The holding areas and maintenance will be unaffected by this, but this is more bad news for a production facility that has been producing well under 400,000 cars per year, less than half its capacity, because of "flat-out chaos" in the supply chain, said CEO of Volkswagen Passenger Cars Thomas Schaefer. This chaos and state of permacrisis is the reason behind the upcoming production stoppages too.
Internal communications with employees have revealed that the impending downtime, which will affect the plant from 9-27 January, is being blamed on supply shortages caused by the COVID-19 pandemic and the ongoing conflict in Ukraine. The plant is currently responsible for producing the Golf, the Tiguan, and the Touran but will soon add the Volkswagen ID.3 electric vehicle to its resume, along with an all-new electric SUV expected to arrive on the market after 2025. Since none of these vehicles are sold in the US at present, we need not fear any delays that will directly affect our market, but if the automaker continues to face supply challenges, the knock-on effect could mean more delays for new vehicles sold in Europe and here.
This challenge is not unique to Volkswagen. Back in August, Honda had to drastically cut production due to its own supply problems. General Motors is also working on refining its own supply processes so that future products are not as severely affected by these constraints.
Earlier, Volkswagen executives expected the supply shortages to ease in the third or fourth quarter of this year but predicted that they would continue into 2024. But now we're almost ready to start 2023, and the Wolfsburg plant will do so with fewer shifts for most of the month. This suggests that the problems could go on even longer. Then again, with extraordinarily sharp interest rate hikes, it would not be a surprise if demand for new cars wanes somewhat in the new year, which may help to ease the pressure on manufacturers.