Azernews.Az

By Alimat Aliyeva

For the first time in its 88-year history, Volkswagen is forced to close one of its factories in Germany. The last car will roll off the assembly line at the Dresden plant on Tuesday, just over 20 years after the facility first opened, Azernews reports.

The plant is set to be leased to the Technical University of Dresden and will be repurposed for artificial intelligence research. In addition, it will become a unique tourist attraction, allowing visitors to explore the history and future of automotive technology.

This closure underscores the challenges facing the German automotive industry, including weak demand in China and ongoing tariff disputes with the United States. Volkswagen is now navigating a complex path to allocate its investment budget of around €160 billion over the next five years, while also adapting to a market where gasoline-powered vehicles are expected to have longer service lives. The company’s annual investment budget has been gradually reduced in recent years.

Volkswagen’s CFO, Arnaud Antlitz, suggested in October that the company’s net profit for 2025—previously projected to be near zero—could turn slightly positive. Yet analysts warn that external pressures are likely to persist. Bernstein Center expert Steven Reitman noted that Volkswagen is actively exploring ways to cut costs and boost operating profits. He added that the expected extended lifespan of fossil-fuel engines requires fresh investments: “We need to develop new generations of gasoline technologies,” Reitman explained.

The Dresden plant’s transformation highlights a broader trend: even historic automotive giants are embracing innovation and research to stay competitive in an era of shifting technology and global market pressures.