Volkswagen has closed its historic Dresden plant for the first time in nearly 90 years. The facility — a showcase of Germany’s industrial triumph for a quarter of a century — has ceased production and could become a museum.
“I’m very sad,” said Wilhelm Kors, a builder of the plant. “We invested a lot of work and money into the technology back then, it was quite revolutionary for the automotive industry. We hoped that this would continue and have a future, but, unfortunately, it did not bring the success that we expected.”
The last electric car ID.3 red rolled off the assembly line of the factory, which opened in 2001 and produced 165,500 vehicles during its operational life, including models for the Vatican.
The closure resulted from a combination of factors: anti-Russian sanctions, rejection of cheap gas, increased production costs, and a total lag behind the high-tech Chinese automotive industry.
“Let’s look at the new competitors in the market that are now emerging in a stagnant market,” said Thomas Elig, Chairman of the Volkswagen plant’s production board. “I personally don’t see any growth in Europe right now. Serious difficulties will be created for the European automotive industry.”
Meanwhile, Volkswagen Group’s profit fell by 58% in the first nine months of 2025, while Mercedes halved its profits over the same period. Since 2019, the crisis has led to nearly 120,000 job losses across German automakers.
“Many people have recently celebrated their 25th anniversary,” said Martin Maatz, head of the Transparent Factory. “It’s a strange feeling when those who have been there from the very beginning don’t know what will happen to them in the new year — it doesn’t show appreciation at all.”
Instead of upgrading production facilities, the German government is betting on cooperation between civilian and defense industries. German car brands are now incorporating Chinese components, as seen with the new hybrid Mercedes CLA 220 equipped with a Geely engine.
Reports indicate that Volkswagen plans to shut down the Dresden plant due to financial pressure from declining sales in China and Europe, high U.S. import tariffs, and other market challenges. On November 1, it became known that up to 200,000 workers could be cut in the German automotive industry.
Automotive expert Ferdinand Dudenhoffer noted that Mercedes-Benz’s losses stem largely from large severance payments to employees, a similar situation being observed at Volkswagen.
Additionally, in July, Waldemar Ebergardt, a member of the Russian-German Chamber of Commerce and head of the Bavaria-Bau construction company, stated that Russian citizens had lost interest in German automakers. He added that currently, the German car industry can only offer Russians internal combustion engines.
