Europe

The world’s biggest carmaker is shutting down in Europe

The German carmaking giant said Tuesday that production at its plants in Spain, Setubal in Portugal and Bratislava in Slovakia will be halted before the end of the week. Factories in Italy that make Lamborghini super cars and Ducati motorcycles will also be idled. Most of the group's other German and European plants are preparing to suspend production, probably for two weeks, Volkswagen (VLKAF) CEO Herbert Diess told reporters on Tuesday."Given the present significant deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants, production is to be suspended in the near future at factories operated by group brands," said Diess.Volkswagen, which owns brands including Skoda, Audi, Porsche and Bugatti, delivered 10.8 million vehicles to customers in 2019, more than any other carmaker. Roughly 44% of the group's 668,000 employees live in Germany, where the company is a leading force in the country's huge manufacturing sector.It's the latest automaker in Europe to close plants as a result of the coronavirus. Fiat Chrysler (FCAU), Peugeot owner PSA Group (PUGOY) and Renault (RNLSY) on Monday announced the closure of 35 manufacturing facilities in total across Europe as regional and national authorities imposed severe restrictions on travel and public life. Together, the three companies sold roughly 12 million cars last year.Toyota (TM), the world's second biggest carmaker after Volkswagen, said Tuesday it was halting operations at two plants in France and Portugal.

14 million European jobs at stake

The closure of car plants in Europe illustrates how the impact on the auto industry from coronavirus is going global. The pandemic has already resulted in extended factory closures and a steep drop in vehicle sales in China. The auto sector is at the heart of Europe's manufacturing industry, and provides direct and indirect employment to nearly 14 million people, according to the European Automobile Manufacturers Association.On Tuesday, Volkswagen said that most of its plants in China were back online, with only two still closed after the country imposed harsh restrictions on travel and business activity earlier this year to combat the initial outbreak of the virus.Yet the outlook for Volkswagen remains highly uncertain. Volkswagen chief financial officer Frank Witter said Tuesday that it was uncertain "how severely or for how long" the coronavirus would affect the company, making it "almost impossible to make a reliable forecast."The plant closures will pile pain on the German economy, which like the rest of Europe is heading for recession.The German economy did not grow in the final three months of 2019, and the outbreak of coronaRead More – Source

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