Volkswagen bet big on electric power in the wake of Dieselgate, and so far that gamble is not paying off. Photograph: Shutterstock
The result is that Volkswagen is now looking down the barrel of an impending financial crisis. One might think that a €10 billion operating profit – announced as recently as the start of August – might not sound like a financial crisis, but that was 11 per cent below the previous year’s and even with increasing EU tariffs on Chinese cars, VW is nervously looking at its profit margins, which currently stand at 6.3 per cent.
In Ireland, Volkswagen is currently staying tight-lipped, and not making any official statements as to how this crisis might affect its Irish operations. Volkswagen Group Ireland is a part of the wider VW Group, rather than being an independent importer and distributor, and last year Renault took the decision to call time on its Irish operations being part of the Renault Group, selling the operation to Cedar Ireland, which also operates Ireland’s Nissan franchise.
Volkswagen reiterated on Monday that restructuring was needed and said it would make concrete proposals on Wednesday. Already it seems as if Audi’s factory in Brussels is doomed – no one’s buying the Q8 e-tron that’s made there, and a plan to sell it to Chinese brand Nio looks to have fallen through.