VW to halt T

Sep 13, 2023

Flood damage is pictured at the KLS Ljubno factory, which is reported to be the supplier that is affecting VW production.

Volkswagen will pause production of the T-Roc small crossover, its top seller in Europe, after heavy floods disrupted engine parts supplies.

Output of other models across the automaker's European factory network may also be hit after a supplier in Slovenia was impacted by flooding in the country.

VW will halt T-Roc output at its Autoeuropa plant in Setubal, Portugal between Sept. 11 and Nov. 12, the factory workers' commission said on Thursday.

It said the company would temporarily lay off staff during this time, but that the situation as it stands now should not have a negative impact on workers' income.

Floods have severely affected a Slovenian company that supplies engine parts for the T-Roc, according to an internal memo sent to the 5,000 employees at the plant near Lisbon.

The supplier affected by the flooding was only able to deliver an order to a limited extent, a VW spokesperson told the DPA German press agency

VW Group said it is "working with other suppliers to find alternatives to return to normal production in the affected plant as quickly as possible."

VW did not name the supplier. Slovenian press reports said the company is KLS Ljubno, a gear rings manufacturer that supplies more than 80 percent of Europe's automotive market.

Flooding caused by storms inundated the factory floors with water and mud, causing damage estimated at 100 million euros.

The flooding affected sensitive instruments and electronic devices that will have to be replaced, KLS Ljubno CEO Mirko Strasek told Slovenian media.

Strasek said the company hopes to be able to restart some production in October.

'Worst ever disaster'

Slovenia has been hit by devastating floods after rivers broke through their banks. At least six people died in what has been described as the country's worst ever natural disaster.

VW expects that other factories likely will suffer production interruptions.

"With the help of our worldwide supplier network, component availability has been secured so far. However, it is to be expected in the course of September that not all component and vehicle plants can be sufficiently supplied, so production losses are to be expected," DPA quoted the VW spokesperson as saying.

The impact will likely be concentrated on plants building combustion engine cars for the VW volume brand.

Deutsche Bank's analysts said on Wednesday that they expect European suppliers and other original equipment manufacturers to be affected by the same supply chain issues in the coming weeks.

Europe's bestseller

VW build 231,100 T-Rocs at the Setubal plant last year.

European sales of the T-Roc in the first seven months were 107,249, according to market analysts Dataforce. The VW brand's No. 2 seller was the Tiguan with 88,020 units sold, followed by the Golf with a volume of 85,730.

The T-Roc was Europe's best-selling car in July, ahead of the Dacia Sandero, according to Dataforce.

Reuters contributed to this report

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