German car giant Volkswagen is considering closing factories in Germany.

On the 2nd, Reuters and other news agencies reported that Volkswagen is considering closing one production facility and one parts factory in Germany. If the factory in Germany is actually closed, it will be the first time since the company was founded.

“The economic environment is becoming more challenging and new competitors are entering the European markets. In this environment, we as a company must act decisively,” Volkswagen CEO Oliver Blume said in a statement.

The company is also considering terminating the employment guarantee system that has prohibited personnel reductions until 2029, and will be discussing this with employees in the future.

Volkswagen means “people’s car” in German, and the company’s consideration of closing its domestic factories speaks to the harsh market environment caused by factors such as the rise of Chinese-made EVs.

Source: Japanese