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By Victoria Waldersee
BERLIN (Reuters) -Volkswagen shares fell greater than 2% early on Wednesday after it issued an in a single day revenue warning triggered partially by the doable closure of an Audi plant.
The corporate lowered its 2024 working return on gross sales forecast to six.5-7% from 7-7.5% and mentioned the Audi model was contemplating closing its Brussels web site, which employs about 3,000 folks, on account of low demand for its higher-end electrical vehicles.
Discovering another use for the plant or closing it, in addition to different bills, would price as much as 2.6 billion euros ($2.8 billion) this monetary yr, Volkswagen (ETR:) introduced.
A session course of is now ongoing on discovering different options for the positioning, it mentioned.
MEXICO MOVE
The way forward for Audi’s Brussels plant was thrown into query earlier this yr after the carmaker mentioned the follow-on mannequin to the Q8 e-tron could be inbuilt Mexico.
Rising orders for newer fashions such because the Q6 e-tron coming to market this yr had led to a pointy drop in curiosity within the older Q8 e-tron produced in Brussels, Audi mentioned on Tuesday.
Audi has struggled to meet up with premium carmaker rivals BMW (ETR:) and Mercedes within the transition to electrical automobiles.
“Merchandise like the primary technology Q8 e-tron had been midway options – not the complete clear sheet like Audi has achieved with its new premium electrical platform,” mentioned Stephen Reitman of Bernstein Analysis. “The potential of the Q6 is increased.”
Audi has promised a refresh in 2024 and 2025 with over 20 new EV and combustion engine fashions, adopted by EV-only fashions from 2026.
ADDRESSING COSTS
Volkswagen, which has robust union illustration, has not closed a plant in 4 a long time, however analysts mentioned the carmaker was underneath stress to cut back vital quantities of extra manufacturing capability.
“Given the low margin on first quarter outcomes, now’s the time to barter with unions,” mentioned Daniel Schwarz of Stifel Analysis.
Some analysts welcomed the information of the doable plant closure as an indication the carmaker is addressing its prices and extra capability.
“Individuals fear as a result of the headline figures play into the priority that VW is in hassle. however this can be a enterprise with an excessive amount of price and so they’re addressing that,” Philippe Houchois of Jefferies mentioned.
“Any transfer by VW to cut back its price base will probably be welcomed by the market,” mentioned Stephen Reitman of Bernstein Analysis.
Volkswagen shares had been down 1.74% at 104.75 euros as of 0943 GMT.
($1 = 0.9241 euros)
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