As a project, I wanted to document tariffs percolating through supply chain network on this blog. Today, NY Times reports that VW Plant in Dresden is shutting down (Alas, article is paywalled).
The last vehicle will roll off the assembly line at Volkswagen’s plant in Dresden, Germany, on Tuesday, marking the first time in the automaker’s 88-year history that it has closed a plant in its home country.
Volkswagen warned of potential production cuts last year, as it faced shaky demand in Europe and China, its biggest market, as well as higher tariffs that have crimped sales in the United States.
After 24 years of vehicle production, the Dresden plant will be converted into a research hub focused on technologies like artificial intelligence, robotics and chip design. Volkswagen will team up with the government of the state of Saxony and the Dresden University of Technology on the project at the plant, known as the Transparent Factory because of its glass walls.
It is obvious tariffs have limited Volkswagen sales in the US. It is possible that the IC engine demand might have shifted more towards American-made cars (purported political reasoning for tariffs). However, it is also a secular trend that the internal combustion (IC) engine auto demand has been falling for many years now as customers have been switching to electric vehicles (EVs).