European car crisis also affecting Central Swiss companies

The Volkswagen company is currently at a low point in its history, and other European brands are also facing problems. This is also affecting companies in Central Switzerland.

Volkswagen was still under British administration when Swiss entrepreneur Walter Haefner signed an import contract with the German car manufacturer at the end of the 1940s. It was the beginning of a long success story. Today, Amag, with headquartered in Cham, is the largest Swiss car importer, with a turnover of over CHF 5 billion, a very large proportion of which it generates through the sale of VW vehicles.

But the long-established German car manufacturer is now facing a crisis. Last Wednesday, Volkswagen announced that its Group profit had plummeted by 64% in the third quarter of this year. Two days earlier, the Volkswagen Works Council announced that VW was planning to close up to three German plants and make tens of thousands of redundancies. This would be the first time that Volkswagen has closed down entire sites in Germany.

Amag sees itself on course
What does the VW crisis mean for Amag? A spokeswoman for the car importer initially emphasised that no official announcement had yet been made by VW regarding redundancy plans. ‘As an independent Swiss company, we do not expect any changes for Amag as a result of possible cutbacks at VW.’

The spokesperson pointed out that the Swiss car market is also currently declining compared to the previous year, although Amag is doing well in this weak market. After a strong 2023, the brands represented by Amag got off to a more subdued start this year, but have been able to make steady gains in recent months. ‘We assume that we will again achieve a market share of more than 30% in a very weak market, which is still a very good share compared to recent years.’ Workshops and service partners are also very well utilised.

Volkswagen is not the only European car manufacturer that is facing a crisis, however. Sales figures are also falling at Mercedes, BMW and Stellantis (Fiat, Opel, etc.). All are suffering from overcapacity and high costs. In addition, electric cars are not selling well due to reduced subsidies, and even the Chinese market is struggling.

View of the Komax production in Dierikon                              Photo: Pius Amrein
 

Short-time working at Swiss Steel and Komax
The general weakness in the European car market is also affecting numerous Swiss suppliers. The crisis at Lucerne-based steel manufacturer Swiss Steel, for example, is largely due to weakening car sales: the automotive industry is the Steel Group's most important customer sector. Short-time working is currently in place at the plant in Emmenbrücke, as well as at Komax  in Dierikon and Cham. Komax manufactures wire processing machines for automotive suppliers. ‘Overcapacity in the automotive industry, particularly in Europe and Asia, and the ongoing global uncertainties have made our customers reluctant to invest,’ said Komax CEO Matijas Meyer in August at the presentation of the half-year figures.

Komax has therefore had to make savings: for example, persons who leave the company are not being replaced, short-time working has been introduced at the Dierikon and Cham sites, and there has been a slight reduction in staff. ‘The challenges we are currently facing In Europe are primarily related to the overcapacity that has been created in connection with the war in Ukraine,’ says a spokesperson.

The automotive industry is also important for the Uri-based industrial group Dätwyler. The company produces elastomer components for various automotive systems and applications in Schattdorf, among other places. Datwyler supplies the manufacturers of brakes, electrical connectors, driver assistance systems and high-voltage batteries. ‘Thanks to a broad product range for systems in vehicles with conventional and electrified powertrains, Datwyler has succeeded in maintaining a constant level of revenue and site capacity utilisation in the automotive business, despite a challenging market environment in the first half of 2024,’ said a spokesperson. The company is thereby not dependent on the business performance of individual car manufacturers.

In the meantime, negotiations with employee representatives are continuing at Volkswagen, and a decision by the Group is still pending. ‘The employees are not only worried about their jobs, they are now afraid,’ said a union representative of IG Metall in Osnabrück recently.