VW to make decision on new Europe plant by October

Volkswagen Group will decide where to build a new European multibrand plant by the end of October, said Skoda’s production boss, Michael Oeljeklaus.

in Automotive News Europe, by Nick Gibbs, 19-09-2019

The search has been narrowed to two sites in Turkey and another in the EU, Oeljeklaus said. He did not name the EU location but reports have said VW is looking at a location in Bulgaria.

VW brand will lead the plant’s development but production will be shared with Skoda, Oeljeklaus said.

“We have increased capacity in the last couple of years in our existing plants, but we are really, really full,” Oeljeklaus told Automotive News Europe at a press event here on Wednesday.

Skoda’s capacity squeeze in Europe cost it 100,000 sales in 2018 and the same will be true for 2019, the brand’s CEO, Bernhard Maier, said in April.

Skoda built a record 886,100 vehicles in 2018 at its Mlada Boleslav and Kvasiny plants in the Czech Republic.

Turkey is said to be VW’s favored location for the factory but another site in Bulgaria is also being considered, according to reports.

VW is worried about steep Turkish taxes on larger cars limit most buyers and local producers to smaller engine sizes. Cars with engines of less than 1.6-liters made up 96 percent of Turkey’s new car market in 2018.

Turkey is trying to find a formula to address VW’s concerns without putting existing automakers at a disadvantage, Reuters reported earlier this month.

Maier said in April that the Skoda Karoq and Seat Ateca compact SUVs were “most likely” to be built in the new plant but stressed that it hadn’t been decided. He said the plant will have a capacity of 350,000 with the possibility of doubling the number if demand increases.

VW Group will decide on which cars to build in the plant at the next group production planning meeting in November, Oeljeklaus said. The factory will start producing cars by the beginning of 2023, he said.

Passat production

After the decision on the new plant’s location, VW Group will allocate production sites for a number of new cars, including the next Superb and VW Passat midsize models due in 2023.

VW has said it will move Passat production from its factory in Emden, Germany, to make way for EV production there. The automaker is considering building the Passat alongside the Superb at Kvasiny, but Oeljeklaus said the allocation wasn’t yet determined and a decision will be made in November.

Skoda will develop the next Passat and Superb, Oeljeklaus said. The two cars share underpinnings.