Volkswagen says moving production if gas shortages last much beyond winter

Volkswagen says moving production if gas shortages last much beyond winter

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Volkswagen, Europe's biggest carmaker, said on Thursday that moving production was one of the options available in the medium-term if gas shortages last much beyond this winter. The carmaker has major plants in Germany, the Czech Republic and Slovakia, which are among the European countries most reliant on Russian gas.

As mid-term alternatives, we focus on greater localization, relocation of manufacturing capacity, or technical alternatives, similar to what is already common practice in the context of challenges related to semiconductor shortages and other recent supply chain disruptions, Geng Wu, Volkswagen's head of purchasing, said in a statement.

Russia slowed gas supplies to Europe and raised concerns that Germany might have to ration fuel. The recent news that gas storage levels hit 90% ahead of schedule has calmed fears of acute shortages this winter, but Germany faces a challenge in replenishing depleted reserves next summer without contributions from Russia.

According to Markus Steilemann, German plastics maker Covestro AG isn't expecting a gas shortage this winter, but won't make investments in Europe because of the region's high energy costs. Growth markets are mainly in Asia, where prices are significantly lower, he said Thursday at a climate conference in Berlin.

Southwestern Europe or coastal areas of northern Europe, both of which have better access to seaborne natural gas cargoes, could be the beneficiaries of any production shift, a Volkswagen spokesman said by phone. Volkswagen Group already operates car factories in Portugal, Spain and Belgium, countries that host LNG terminals.

Volkswagen said it was concerned about the impact high gas prices could have on suppliers, despite saying it had made the best possible preparations for winter gas shortages.

The government must curb the explosion of gas and electricity prices, as well as the explosion of gas and electricity prices, according to Thomas Steg, the company's head of external relations. Small and medium-sized energy-intensive companies in particular will have major problems in the supply chain and will have to reduce or stop production. None of the people likes annual performance reviews - Here is how to get rid of them.