Volkswagen contemplates shifting Golf manufacturing to Mexico.
Volkswagen is contemplating major changes to bolster its main brand's financial well-being. One of the potential solutions under consideration is the potential shift of its iconic car, the Golf, from its German headquarters in Wolfsburg, possibly to Mexico in the future. However, this option isn't currently seen as the most probable decision.
The company refused to provide comments on this matter. A spokesperson for the workers' council dismissed the pertinent rumors, stating they are quite distant from any impending decisions. Previously, "Handelsblatt" had published such reports. The Golf, like the Beetle before it, has earned the status of VW's leading model. Presently, this car is solely manufactured at their German location in Lower Saxony for the global market. In Mexico, the organization has a facility in Puebla that previously produced the Beetle for the North American market.
At present, management and employee representatives in Wolfsburg are in wage negotiations aiming to lower costs. These discussions involve scrutinizing work and factory costs, job losses, and potential plant closures.
Volkswagen is demanding a 10% wage reduction, arguing it's essential to fund future investments. In return, the workers' council seeks a stable roadmap for the upcoming years. The next round of negotiations is scheduled for the beginning of the next week.
The Golf might move to Poland
During the company's so-called planning round, typically, the allocation of future models among the factories is a subject of interest, which lays out investments for the next 5 years. This time, given the company's planned cost reductions, both the allocation and the work distribution are also part of the wage negotiations.
If the Golf, a prominent Wolfsburg plant's flagship model along with the Tiguan, were to cease production, the employees would likely request alternative models to ensure ongoing employment at the plant. Another potential manufacturing location for the Golf, according to the information, is a VW plant in Poland. In fact, the Poznań plant was intended to have excess Golf production from Wolfsburg.
Both Mexico and Poland are less expensive than Germany. However, either location could be influenced by any tariff threats from former and current US President Donald Trump. The timeline for when the Wolfsburg-made combustion engine Golf will no longer exist is uncertain.
Notably, Volkswagen has prepared for a likely EU-wide ban on combustion engines by 2035 by investing significantly in new electric models. Thus, a conceivable scenario at the Wolfsburg location could involve the production of a high-volume electric vehicle, such as a fully-electric version of the Golf named "ID.Golf".
The potential shift of the Golf from Wolfsburg to another location is under consideration, with Poland being mentioned as a possible new manufacturing site for the iconic VW model.
If the Golf were to be produced in Poland, it could help Volkswagen reduce costs and remain competitive in the global market, given Poland's lower production costs compared to Germany.
