This is not the kind of news investors like to read.
The third most valuable car maker in the world, VW, has put a hold on new hires until end of year 2020, VW’s brand’s chief said on Wednesday.
As reported by Reuters: Despite a slight recovery in demand, car sales remain below levels seen before the coronavirus crisis, Ralf Brandstaetter said in an interview published in an internal VW newsletter, which was seen by Reuters.
“We remain under substantial cost pressure. Deliveries and therefore revenue have dropped sharply. At the same time a large amount of costs remain. This is why we have decided not to add new people,” Brandstaetter said.
There are also reports that the carmaker has reduced working shift to just 2, from 3 shifts system. Osterloh in an interview with a local paper, the Wolfsburger Nachrichten, said Volkswagen cannot produce the regular daily 3000 cars.
Nothing shocking here, as less working hours obviously equals lesser workers, which equals less car production. The question now is, how long this is expected to last.
According to Osterloh in an interview with Wolfsburger Allgemeine Zeitung, production is highly expected to drop this year at the plant in Wolfsburg, to around 500,000 cars, instead of 700,000 which had been planned.
This in our opinion must be the effect of the coronavirus pandemic, coupled with the huge success and massive hype of electric car giant, Tesla Inc!. Investors must be worried at the moment if their investment in Volkswagen is going to produce profit or not.
Alright guys, kindly share your opinion with us in the comment section. Is this the beginning of the end of Volkswagen, or just a bump along the road?.