The Volkswagen Group has reportedly halted production of the Volkswagen ID.3 and Cupra Born due to low demand.
Automobilwochereportsproduction for the two models at its Zwickau and Dresden plants is expected to resume next year.
Volkswagen Group Australia has confirmed the production halt will not affect local supply.
"A substantial number of Borns have been brought to our market and are continuing to be brought to our market to meet increasing BEV demand," a spokesperson for the Volkswagen Group told CarExpert.
"The Born is now the second most popular Cupra in Australia. Delivery times are short for the Cupra Born.
"The ID.4 and ID.5 go on sale in June/July next year and we anticipate strong volume for our market."
This isn't the first time production has been stopped for the hatchbacks.
According to MDR, the company previously halted production operations at Zwickau and Dresden in September due to weakened demand. It resumed operations two weeks later.
In October, production line one at Zwickau was paused for two weeks also due to weak demand, before it was resumed but on a smaller three-shift operation. The third shift was subsequently cancelled.
In November, production was halted for three weeks due to difficulties procuring electric motors.
Earlier this year, Volkswagen boss announced its Dresden plant, known as the Transparent Factory, may cease producing vehicles as part of a cost-cutting drive by CEO Oliver Blume. It currently produces only the ID.3.
Cutting production at Dresden would reportedly save around 20 million euros (roughly A$33 million) a year, with the plant currently costing 60 to 70 million (roughly 99-115 million AUD) euros a year to operate.
According to Automobilwoche, Volkswagen has reportedly already cut 269 jobs from its factories this year.
Roughly another 500 additional temporary employees will not have their contracts renewed in 2024. An internal memo sighted by Automobilwoche claims Volkswagen brand chief Thomas Schäfer says "the situation is very critical."
This comes after Mr Schäfer reportedly told staff "with many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand".
The company is reportedly looking at offering partial or early retirement to an unspecified number of workers, despite previously indicating it wouldn't cut jobs until 2029.
MDR reports Volkswagen executives will meet this week in Wolfsburg to discuss the "situation".
Production for the ID.4, ID.5, and Audi Q4 e-tron range has resumed this week after production was reportedly halted due to weak electric vehicle demand.
Content originally sourced from: CarExpert.com.au