Audi mulls closing Brussels plant as EV demand falters

The logo of German automotive manufacturer Audi is displayed at the plant of Audi Hungary, one of the world’s largest engine factories, in Gyor, Hungary on November 7, 2023, prior to festivities to celebrate the 30th anniversary of Audi Hungaria. The Hungarian subsidiary of German automotive manufacturer of luxury vehicles started the serial production of it’s new generation electric engine. (Photo by Attila KISBENEDEK / AFP)

Frankfurt, Germany — German luxury carmaker Audi said Tuesday it is considering closing its Brussels plant making electric vehicles due to a global decline in demand for high-end electric cars.

The manufacturer, whose parent company is Volkswagen, said it is weighing up the “early end of production” of its Q8 e-tron models at the factory.

Management are discussing “solutions for the (Brussels) site,” and this “may also include a cessation of operations if no alternative is found”, it said in a statement.

READ: Audi CEO: planning electric car factory in U.S. due to IRA

The site employs about 3,000 people.

Audi cited a “global decline in customer orders in the electric luxury class segment” as a reason.

After investing heavily in the shift to electromobility in recent years, automakers have been hit hard in recent times by slowing demand for electric vehicles.

Volkswagen — whose 10 brands also include Porsche, Seat and Skoda — said closing the Brussels plant, or finding alternative uses for it, as well as other unplanned expenses would have an impact of as much as 2.6 billion euros ($2.8 billion) in the 2024 financial year.

As a result, the car giant lowered its forecast for operating returns this year to 6.5-7.0 percent from 7.0-7.5 percent previously.

As well as the slowdown in demand for electric cars, Audi cited “long-standing structural challenges” at the Brussels site.

These include a plant layout that is hard to change and high logistics costs.

A consultation process will now be carried out about next steps, Audi said.

“The announcement of the intention does not mean that a decision has been made,” said Volker Germann, CEO of Audi Brussels.

“Nevertheless, this news has been felt very profoundly by the employees in Brussels.”

Rita Beck, spokeswoman for the Audi Committee in the European VW Group Works Council, said Audi staff representatives were “calling for long-term prospects for the plant and our colleagues in Brussels. Audi management must take responsibility for the site.”

In the first quarter of this year, Volkswagen reported a more than 20-percent fall in profits with deliveries of more expensive models, including Audis, slipping.