Audi considers restructuring factory in Brussels

It was already known that Audi wanted to relocate production of the next generation of the Q8 e-tron to Mexico. However, Audi is now considering withdrawing production from Belgium ahead of schedule. Discussions have now begun - which could even end with the closure of the plant. (UPDATE BELOW)

Image: Audi

The announcement is entitled “Audi is formulating its intention to restructure the Brussels site,” and makes it clear that something will happen, however not even Audi is sure of what that will be. It was clear that the plant would need a new model following the announced production transfer of the Q8 e-tron to Mexico. However, Audi management had previously always emphasised that it wanted to hold on to the Belgian site and find a common future.

Audi is observing “a global decline in customer orders in the electric luxury class segment,” which also affects the Q8 e-tron and Q8 Sportback e-tron built in Brussels. There is talk of a “segment-specific intensified drop in demand”. With the production ramp-up of the Q6 e-tron on the significantly more modern PPE, customer orders for the Q8 e-tron have continued to decline.

Audi cites not only the market situation but also internal reasons such as “long-standing structural challenges at the Brussels site”. The plant layout can hardly be changed due to the particular location of production close to the city centre. In addition, there are high logistics costs, which overall lead to “high production costs in Brussels compared to other sites”. In other words: if even the production of a luxury-class model with higher margins is hardly worthwhile, it will hardly be possible to produce cheaper models there at a cost-covering level.

“The Board of Management of Audi Brussels has informed the Company Council of their intention to carry out a restructuring of the site. This announcement triggers the launch of the information and consultation process with the Company Council of Audi Brussels, in accordance with Belgian law. In the course of this process, the company management will discuss solutions for the employees and the site together with the responsible social partners, and examine alternatives in detail,” the Ingolstadt-based company announced.

It is not clear from the Audi press release whether the alternative of building an electric luxury SUV above the current Q8 e-tron in Brussels, which has been discussed in the meantime, is still in the running. The Ingolstadt-based company only emphasises the review process that has now been initiated and cites the possible end of production as a kind of worst-case scenario. However, the problems have been known for some time, which is why the consultation that has now been opened could actually mark the beginning of the end – this process is provided for under Belgian law.

With a capacity of 120,000 units, the Belgian plant is the smallest production site in Europe; otherwise, Audi still produces in Ingolstadt, Neckarsulm and Györ in Hungary. But even this capacity was not nearly utilised in Brussels recently: Audi only produced 37,400 vehicles in Belgium in 2023, according to figures from Marklines. In the course of last year, the model changeover from the e-tron quattro to the Q8 e-tron also took place, but this was only a facelift of the original model. However, the SUV model never exceeded sales of 47,900 vehicles in 2022.

“The decision to start the information and consultation process at the Brussels site was made after an intensive review and is supported by AUDI AG,” said Gerd Walker, Member of the Board of Management for Production. “The task now is to shape this process constructively and transparently together with all those involved and to discuss viable solutions in the interests of all. Because we clearly stand by the responsibility we bear for our employees, at all locations worldwide.”

“The announcement of the intention does not mean that a decision has been made. Nevertheless, this news has been felt very profoundly by the employees in Brussels and by me too. A transparent and constructive dialog is important in the process that will follow. We will take all perspectives into account,” explained Volker Germann, CEO of Audi Brussels.

Update 19 July

The final closure of the Audi plant in Brussels has neither been decided nor averted. Nevertheless, the plant will temporarily shut down over the next four weeks – due to a lack of demand. Audi confirmed to the German publication Automobilwoche that only a few administration and maintenance employees will stay on during that time. The four-week shutdown will begin on Monday. That means that Q8 e-trons and its Sportback variant will be manufactured again on 19 August – at the earliest.

According to the report, the plant’s management and the works council met on Thursday. However, there was no breakthrough in the negotiations regarding the site’s future. The next meeting is scheduled for 22 August. Unlike for the production employees, it won’t be a work-free period for the management and the works council., (Update; in German)

1 Comment

about „Audi considers restructuring factory in Brussels“
22.07.2024 um 10:16
The market for overpriced luxury EVs is saturated. Everyone wanted to be the next Tesla and have discovered there's a very limited market.

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