VOLKSWAGEN

Cracks in the Crystal Palace

Transparent Factory Imago
Volkswagen's Transparent Factory, Dresden.
  • Why it matters

    Why it matters

    Uncertainty over the future of VW’s Transparent Factory in Dresden indicates a scaling back of the automaker’s ambitions.

  • Facts

    Facts

    • The Transparent Factory, located in Dresden’s city center, cost €186 million to build.
    • The Phaeton luxury sedan, the factory’s only product, starts at €90,000. Only 4,000 were sold in 2014. The Phaeton will be discontinued after 2016.
    • VW’s supervisory board plans to keep the Transparent Factory open. A roadmap for the plant’s future will be adopted in February or March.
  • Audio

    Audio

  • Pdf

It’s more than just an assembly plant. The Transparent Factory is Volkswagen’s pride and Joy, a €186 million ($202 million) prestige project that produces the automaker’s most expensive vehicle. The basic version of the Phaeton luxury sedan costs €90,000, though buyers are normally looking at six figures.

During times of crisis, however, there’s little room for prestige. Volkswagen faces the biggest crisis in its 78-year history.

The automaker has put aside €6.7 billion to deal with the fallout from systematically cheating U.S. regulators on diesel emissions. Moody’s has put the total cost of the scandal at €40 billion, while Credit Suisse estimates a cost of €78 billion in its worst-case scenario.

Volkswagen posted a third-quarter loss of €3.5 billion for the first time in more than 20 years. Stocks have plummeted by 37 percent since the scandal broke in September.

Given the difficult times, the automaker’s leadership is now mulling what should be done with its castle made of glass, located in the heart of Dresden. The Phaeton, the only car the plant produces in any significant number, was never a best seller by any stretch of the imagination.

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