Volkswagen restructures production; new Polish factory to open in 2016

VW will build the Crafter, shown, in Poland.
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FRANKFURT -- Volkswagen Group is shuffling its European production, adding a $1.1 billion euro van plant in Poland and rearranging output of the Porsche Panamera and Cayenne models, and VW Tiguan.

VW will build a factory in Wrzesnia, Poland, to produce the Crafter commercial van. The plant will employ more than 2,300 people, with production starting in 2016, VW said in a statement today.

Daimler has built the Crafter alongside the Mercedes-Benz Sprinter at its factories in Dusseldorf and Ludwigsfelde in Germany since 2005 but this will end in mid-2016.

VW also said that production of the Porsche Panamera will be consolidated at Porsche's plant in Leipzig, eastern Germany, in 2016. Currently, VW's factory in Hanover produces Panamera body shells that are shipped to Leipzig for completion.

Porsche, fully acquired by VW in 2012, will spend another 220 million euros on facilities at its plant in Leipzig to make the bodies of the Panamera coupe from 2016. It spent 500 million euros last year to upgrade the site for production of the new Macan SUV model.

Porsche will move production of its Cayenne SUV out of Leipzig to VW's plant in Bratislava, which has been making the bodies and interior for the model's final assembly in Leipzig.

VW will transfer some production of its Tiguan compact SUV to Hanover from Wolfsburg to compensate for lost Panamera production. The move will ease strains on Wolfsburg where production of the Tiguan, one of VW's top-selling European models, has needed additional shifts for several quarters.

The Hanover plant lost out in its bid to build the Crafter van.

Labor costs

Building the Crafter in Wrzesnia about 270km (170 miles) west of Warsaw, will allow VW, which already makes the Caddy and T5 commercial vehicles in nearby Poznan, to significantly reduce its production costs. Labor costs in Poland were just under 7 euros an hour in 2012, compared with 37 euros in Germany, according to the Cologne-based IW economic institute.

"By taking the decision to build the Crafter in Poland, we are setting the course for the strategic realignment of our light commercial vehicles," Leif Oestling, head of VW's trucks business, said in the statement.

The new Crafter built in Poland will use a new platform developed for the Crafter and the automaker’s T line of vans, Automobilwoche, a sister publication of Automotive News Europe, reported Jan. 27. The platform has been dubbed MNB (Modulare Nutzfahrzeugbaukasten -- modular commercial vehicle kit), and will underpin 29 derivatives in the T and Crafter product lines, including front-, rear- and all-wheel drive vehicles, the paper said, quoting VW sources.

The investment in Crafter production is part of a broader effort by European automakers to reposition their van operations ahead of a potential recovery after a recession sapped demand. "There's a close connection between the overall economic development and van demand," said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler. "Commercial-vehicle sales will rise with the economy."

Industrywide van sales in Europe were essentially unchanged in 2013 at 1.44 million vehicles, 35 percent below the 2007 level.

Daimler is letting the van cooperation with VW lapse at the end of 2016 to use capacity for the next version of the Sprinter. Its Ludwigsfelde and Dusseldorf plants have combined annual production of about 150,000 vehicles.

Reuters and Bloomberg contributed to this report

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