Volkswagen boss Wolfgang Bernhard has confirmed to the German newspaper Handelsblatt that the new Scirocco will be built at the Autoeuropa plant in Setubal, Portugal.
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The decision is a major setback for Wolfsburg, which is the lead plant for the Golf and Volkswagen cars based on the Golf-platform. Building the Scirocco there would have given Wolfsburg the chance to improve capacity utilization and improve its competitiveness.
The Setubal plant already builds the new VW Eos cabrio, and the VW Sharan and Seat Alhambra MPVs. The MPVs are both at the end of their life cycle.
According to Handelsblatt production of the Scirocco will start in 2008 at a rate of more than 100,000 cars a year, although this conflicts with a report by the German car magazine auto motor und sport, that says that 150,000 Sciroccos will be built over the entire life cycle of the model.
Volkwagen executives, Wolfgang Bernard and Horst Neumann, have told Handelsblatt in recent weeks that Volkswagen’s west German plants have no future unless costs are reduced. The company is currently negotiating with unions how to achieve a 20,000 reduction in the workforce, and appears to be seeking a complete overhaul of existing labour contracts, returning to a 35 hour week instead of a 28.8 hour week, for no extra pay.
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By GlobalDataBernard has even suggested that Golf production at Wolfsburg is not guaranteed. Managers want to reduce the cost of producing the Golf in Wolfsburg by 1,000 euros. Bernard is reported to have told a works meeting that 400 euros of this should come from better capacity utilization. The Scirocco would have helped here. If no new models can be added to production at Wolfsburg, the alternative appears to be moth-balling parts of the site.
Fewer Volkswagen models are assembled in Germany than ever before. Only the Golf, Passat and Touran are now assembled in the country. The Polo comes from Spain and Slovakia, the Touarag comes from Slovakia. The Jetta and New Beetle are produced in Mexico and the Fox in Brazil.
Wolfsburg has won one new model recently. It will build the Golf-based SUV, although this will be at the Auto 5000 subsidiary, which is 20% cheaper than the main plant, according to Handelsblatt.
