Volkswagen Golf VII cars are pictured in a production line at the plant of German carmaker Volkswagen in Wolfsburg, March 13, 2015. Credit: Reuters/Fabian Bimmer
(Reuters) – Volkswagen will reduce shifts and lay off at
least 150 workers at its Russian car plant, to try to cut costs in a market
downturn, the German car producer said on Monday,.
Car sales in Russia dropped sharply last year as the economy
was hit by a fall in oil prices and Western sanctions over Ukraine. The rouble
also weakened and hurt demand.
General Motors said last week it will shut its Russian
factory and wind down the Opel brand in the country, while Nissan Motor Co
suspended Russia production for 16 days this month.
"In the first months of 2015 the Russian auto market
continued to feel the impact of a weak economy, significant price increases and
high interest rates. We don't expect that to change in coming months,"
Volkswagen said in emailed comments.
Volkswagen car plant in Kaluga, south of the capital Moscow,
will work four days a week from April to July this year and starting from May
the number of shifts will decrease to two from three.
As part of measures intended to help the company adapt to
the current economic environment, the production will be suspended for two
weeks on May 5-8 and May 12-15.
Volkswagen will not renew contracts with at least 150
employees and will offer some others the chance to move to its new auto parts
warehouse in the Moscow region or an engine plant. Both are scheduled to open
later this year.
It will also offer compensation packages to employees who
will give up their jobs by mutual agreement.
Volkswagen's Russian sales fell 40 percent in
January-February, year-on-year, while the broader market was down 32 percent,
according to Moscow-based lobby group the Association of European Businesses.
However, the German carmaker said its Russian investment
plans are intact, with the construction of the engine plant and the auto parts
warehouse on schedule.
"The Russian market still has a significant growth
potential long-term," it said in the statement.
