Post by : Mariam
Al-Faris
For the first time in its 88-year history, Volkswagen will close its Dresden factory, with the last car rolling off the assembly line on Tuesday. The plant, opened just over 20 years ago, will now be leased to the Technical University of Dresden for artificial intelligence research. It will also serve as a tourist attraction, allowing visitors to explore both the history and future of automotive technology.
The closure reflects broader challenges in the German car industry, including weak demand in China and ongoing tariff disputes with the United States. Volkswagen is planning to manage its €160 billion investment budget over the next five years while adjusting to a market where gasoline-powered cars are expected to last longer. The company’s annual investment budget has gradually decreased in recent years.
Volkswagen’s CFO, Arnaud Antlitz, indicated that the company’s net profit for 2025, once expected to be near zero, could turn slightly positive. Analysts, however, warn that global pressures may continue. Expert Steven Reitman from Bernstein Center said Volkswagen is actively seeking ways to cut costs and improve operating profits. He added that the longer lifespan of fossil fuel engines requires new investment in gasoline technologies.
The Dresden plant’s transformation into an AI and research hub shows how historic automotive companies are embracing innovation to stay competitive amid shifting technology and global market challenges. This move highlights Volkswagen’s effort to balance tradition with future-oriented development in the automotive sector.
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