Volkswagen Plant in Germany Shut Down Due to Fierce Competition

KatadataOTO – Volkswagen is closing its assembly facility in Dresden, Germany. This marks the first time in 88 years that VW has ceased production in its home country.

A red electric car model, the VW ID.3 GTX, is said to be the last Volkswagen product assembled in Dresden.

There were several factors considered by Volkswagen in making this decision. One of them is weakened cash flow due to declining sales in China.

Tariff-related regulations are also said to be a burden for Volkswagen, preventing it from selling vehicles to its full potential in the United States.

Photo: VW

For some time, the Germany-based manufacturer has been looking for ways to reduce expenses.

“The decision to end vehicle production at the Transparent Factory after 20 years was not an easy one. But it is important from an economic perspective,” said Thomas Schaefer, CEO of Volkswagen, as quoted by France 24, Thursday (18/12).

In the midst of the electrification era and technological advancements, Volkswagen faces challenges in developing gasoline-powered cars.

Undeniably, the influx of new energy vehicles from China has become a threat to many manufacturers.

The prices offered are lower with the latest technology. Many of them are also entering the premium segment, previously dominated by European manufacturers.

The Volkswagen factory in Germany will be converted into a research and development (R&D) center focusing on chips, Artificial Intelligence (AI), and robotics in collaboration with the Technical University of Dresden.

Additionally, a number of factory workers assigned to Dresden will be offered positions at other facilities.

For your information, Volkswagen still offers several models for Indonesian consumers, such as the Tiguan and the VW ID Buzz electric car.

Photo: VW

Under the Indomobil Group, throughout 2025, Volkswagen recorded retail sales of 232 units in the January-November period.

Processed from Gaikindo data, their lowest sales figure was recorded in April 2025 with 6 units. Meanwhile, the highest was 50 units in May.

Volkswagen Sales in Indonesia (Retail)

• January, 8 units
• February, 7 units
• March, 19 units
• April, 5 units
• May, 50 units
• June, 39 units
• July, 16 units
• August, 35 units
• September, 24 units
• October, 16 units
• November, 12 units

Total: 232 units