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The German automaker is implementing significant changes to adapt to new market realities and overcome economic adversities
The German automaker faces a crisis significant that requires quick and effective actions. With plans to lay off 35 thousand employees and transfer production from Golf protocols for Mexico, Volkswagen seeks to regain its competitiveness amid growing competition from brands Chinese and other new players.
Declining Performance: Global Impact on Operations
Em 2023, Volkswagen produced about 9 million of vehicles, well below their total capacity 14 million. This decline is attributed to rising logistics, energy and labor costs, with profit margins falling to 2,3%.
The loss of market share in China exacerbates the situation, with the company's electric vehicle lineup lagging behind its competitors.
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Adaptation and innovation: Technological and strategic challenges
Experts indicate that the Volkswagen, along with other German automakers such as Mercedes e BMW, was slow to adopt the transition to electric vehicles.
A lack of technological advances and high production costs have undermined the competitiveness of the German automotive industry, forcing the company to announce a drastic cost-cutting plan after a slump in 64% in earnings in the third quarter of 2024.
External pressures: Tariffs, strikes and political instability
Tensions rise with warning strikes at German factories and the threat of import tariffs from United States.
The victory of Donald Trump in the presidential elections, uncertainty increases for the Volkswagen and other European automakers, which face a near-perfect storm of economic and political challenges.
Two fewer models from the German automaker on the market
A Volkswagen announced that until 2027 will stop producing its models convertibles e station wagons with a sporty design, ending production of the T-Cross Cabriolet and Arteon Shooting Brake. This movement marks the end of more than 70 years of history and reflects the company's need to adapt to the new demands of the global automotive market.
The Road Ahead: Restructuring and Competitiveness
With the political crisis in Germany and the calling of new elections, Volkswagen represents an example of the difficulties faced by the German automotive industry.
The company’s ability to navigate these changes will determine its future in the competitive global marketplace as it seeks to redefine its strategy and remain relevant in a rapidly evolving landscape.
