Tuesday, June 20, 2006

Volkswagen to Build Scirocco in Portugal Plant

Text from Reuters UK.
HAMBURG (Reuters) - Volkswagen will build a successor to the Scirocco sport coupe at its plant in Setubal, Portugal, Europe's biggest carmaker said on Tuesday, reviving a model that was first popular in the 1970s.

A company spokesman said VW had made the decision early this year but had announced in the past only that it would bring a new model to Portugal without saying which one.

He insisted the decision had nothing to do with a standoff with labour over VW's plans to extend the work week for staff in western Germany to 35 hours from 28.8 at no extra pay, an idea labour leaders have rejected.

Awarding the car to Setubal is a blow to VW's main German plant in Wolfsburg, which needs more work to fill idle capacity.

VW has said 20,000 jobs in Germany are at risk unless it can boost productivity and cut labour costs that are the highest in the global car industry.

The Scirocco was popular in the 1970s and 1980s and there has been speculation that VW would revive the model based on the VW Golf.

Germany's Handelsblatt newspaper quoted company sources as saying Scirocco production would start in 2008 and said industry observers expected annual output of more than 100,000 units.

The Setubal plant already makes the VW Eos coupe-cabriolet plus the VW Sharan and Seat Alhambra vans. The vans are reaching the end of their model life cycles.

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