Volkswagen plans new site in Germany to counter Tesla’s gigafactory

FRANKFURT, Nov 9 (Reuters) – Volkswagen (VOWG_p.DE)said on Tuesday it plans to build a new state-of-the-art car factory close to its headquarters in Wolfsburg, Germany, hoping to raise its game as the opening of Tesla’s (TSLA.O) gigafactory near Berlin draws closer.

The plant, which still requires approval by Volkswagen’s supervisory board over the coming weeks, is part of the group’s Trinity project under which the carmaker wants to build a flagship electric sedan in Wolfsburg from 2026.

Constructing an all-new plant is an alternative to adapting the existing Wolfsburg plant to produce the Trinity model, which VW says would limit the possibilities for more radical changes to the manufacturing process.

“That way we are gaining time and space to gradually modernise the main factory in a far-reaching way and raise production there, too, to a new level.”

Volkswagen CEO Herbert Diess has benchmarked Wolfsburg against Tesla’s German site, expected to open later this year or early next, arguing that VW’s main site was way behind in terms of efficiency and speed.

This has helped to escalate a conflict between Diess and labour representatives, who have accused the CEO of spreading fear by warning of major job cuts that a shift towards leaner faster production would entail.

Diess earlier on Tuesday said there were no plans for mass layoffs.

Reporting by Christoph Steitz; Editing by Bernadette Baum and Mark Heinrich
Source : Reuters