Volkswagen is considering moving production out of Germany due to the energy crisis

Volkswagen may move production outside of Germany and Eastern Europe if natural gas shortages continue. Europe’s biggest carmaker said today it is considering a medium-term transfer of production as an alternative if natural gas shortages continue beyond the winter of 2023.

The German giant maintains production plants in Germany, the Czech Republic and Slovakia, countries particularly dependent on Russian gas.

As medium-term alternatives, we focus on more local production, capacity transfer, or workaround techniques similar to those already in place in the context of the challenges posed by semiconductor shortages and other recent supply chain problems;

said Geng Wu, head of purchasing at Volkswagen, adding:

Policymakers must also curb the currently uncontrollable boom in gas and electricity prices. Otherwise, small and medium-sized enterprises that require high energy will have major problems in the supply chain and will have to reduce or stop production.

The escalation of the war in Ukraine has raised concerns that Germany will be forced to impose a ceiling on the consumption of fuel and energy raw materials. Despite the efforts of the Scholz government to reassure citizens and German businesses, there is widespread concern about how the country will manage to meet its energy needs beyond the winter without the use of Russian gas.

However, Germany announced earlier this week that natural gas storage centers are already 90% full, which guarantees a smooth winter outcome. But the question remains, what will happen from mid-2023 onwards.

The beneficiaries of this potential development will be the countries of Southeast Europe, specifically Portugal, Spain and Belgium, where the automobile industry already maintains factories. These countries, having ports and LNG storage units, are a solution, as they can receive cargoes of natural gas from the sea.

Russia is Germany’s main source of natural gas and recently cut off gas deliveries through the Nord Stream 1 pipeline. The shutdown was initially intended to be temporary and according to Russia, was put in place to allow repairs to take place, but was later extended indefinitely.

The decision is seen as a political move to punish Western countries for sanctioning Russia over its invasion of Ukraine and will cause severe gas shortages from June 2023 if the line is not reopened, VW says.


Source: Autoblog.gr by www.autoblog.gr.

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