Volkswagen has suspended work on developing an all-electric version of the Golf at its main plant in Wolfsburg.
Reuters reports this, citing an internal memorandum.
Thomas Schäfer, head of the Volkswagen passenger car brand, told employees in the memo: “I know what the Golf means to Volkswagen and to Wolfsburg. That is precisely why this decision was not an easy one for us.” He added: “We simply cannot afford this work at the moment.”
According to the memorandum, the Wolfsburg plant is €300 million behind its cost-reduction target. Although the facility is not among those facing the threat of closure, pressure on Volkswagen’s German production sites continues to mount.
The plants in Emden and Zwickau have made progress in their efforts to improve efficiency. They are among four German facilities facing potential closure amid growing competition from China and declining demand in key markets.
The decision comes as Volkswagen undergoes a major restructuring. The automaker plans to cut 100,000 jobs and close up to four plants in Germany.
On Thursday, the company reported its largest quarterly loss in more than a decade and renewed its call for stakeholders, including trade unions, to support its restructuring plan.