Volkswagen Group has warned that capacity under-utilisation means that it is considering the future of its EV-producing Audi Brussels plant.

In a statement, VW said that due to the development of sale of the “Audi Q8 e-tron model family in certain markets”, it has decided to support an information and consultation process at the Brussels site as required by Belgian law.

In this process, the statement added that the Board of Management of Audi Brussels S.A./N.V. is working together with the responsible social partners to develop solutions for the site. However, it said that at the end of this process, ‘the site may among other things be closed down.’

VW also said that closing the Brussels plant, as well as other unplanned expenses, would have an impact totalling up to €2.6 billion in the 2024 financial year.

GlobalData figures for vehicle production at the VW Group Brussels ‘Forest’ plant in Belgium show that it made just over 50,000 Audi Q8 e-tron range cars in 2023. However, that is forecast to dip to under 40,000 units in 2024.

GlobalData analyst Justin Cox told Just Auto that VW Group put considerable investment into the plant to make high-end Audi electric vehicles, but market demand has turned out much lower than expected. “We’re seeing that EV demand is a little soft in Europe and that is particularly so when we are looking at high-end EVs such as the Audi Q8 e-tron range,” he said. “Further, there are other legacy concerns for VW Group over the Brussels plant, too. It sits in an urban area and comes with space and use constraints.

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“On balance, it looks like closure is a likely outcome unless another use for the plant can be found, but clearly VW Group has not been able to juggle model-mix from elsewhere to put more volume into Brussels and make it viable. The Q8 e-tron is also earmarked to be made at a plant in Mexico, which obviously made the plant’s future vulnerable.”

VW Group brand Audi AG has owned the Belgium site since 2007. After acquiring it, Audi Brussels converted the plant to produce the Audi A1, a new addition to the Audi model range at the time. From 2016, it only made electric Audi cars. There are around 3,000 employees at the plant.