Volkswagen to keep its Chakan plant shut for another month

MUMBAI: Volkswagen has decided to shut down production from mid-December to mid-January, which will be its second month of no production. A twomonth long no-production period is unprecedented in the Indian auto industry.Earlier, it had shut its Chakan plant for a month from mid-October to mid-November. With its India 2.0 project another 18 months away, Volkswagen is in for prolonged pain. Slowing export markets, decade-low domestic volumes and discontinuation of diesel and Ameo sedan are together expected to pull down the brand to a new low.As against the plan of delivering volumes of close to one lakh units, Volkswagen is likely to fall short of its annual target by 15% in 2019 to 85,000 units (production), said several people aware of the company’s plans. 72233145 “With its modular MQB architecture being implemented in more markets around the world, the demand for Indian products, which are based on the old generation PQ25, has been gradually going down. The low offtake in the domestic market in not helping either. There is pressure to install the MQB line in India at the earliest to align with global production,” said one of the five people aware of the company’s plan.This shutdown is happening at a time when the PV market is witnessing its steepest decline in sales in last two decades. While overall exports so far this year have remained in green with a 3% increase, VW India has seen shipments fall 11% from April to October of FY20.The plan is to move to a new generation MQB line by the 17th week of 2020 in order to be ready for the future, added another person aware of the company’s plans and this shutdown may be in sync with the shift planned.An email send to Volkswagen India's brand team that oversees sales and marketing activity remained unanswered.A Škoda Auto Volkswagen India spokesperson said the company is preparing for the next generation of products within the India 2.0 project. “Several upgrades are in progress at our facilities to accommodate changes in the production lines for MQB A0 IN platform. We are systematically planning our non-production days to sustainably meet our deliveries without any delay.”

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