VW halts production at two German plants

Volkswagen is suspending production at its main gearbox plant as the carmaker grapples with reduced demand and the effects of technical problems at another German site.

Europe's largest automaker will halt production in some areas of its factory in Kassel on February 1, February 5 and February 8, a spokesman for the factory said on Friday, confirming a report by regional newspaper Hessische Niedersaechsische Allgemeine.

Production at Kassel, where Volkswagen (VW) produces more than 4 million gearboxes a year and makes body parts for the Passat saloon, was already suspended on Friday with 400 workers affected, the spokesman said.

Output at Kassel, where VW employs about 16,000 people, is affected by slower demand for components and technical problems at the stamping plant of VW's factory in Emden where the Passat is assembled, he said.

Production at Emden, which has a workforce of about 9,600, may remain shut on Monday after being suspended on Friday, he said, without being more specific.

VW has said it is bracing for tough markets this year after suffering the first drop in sales of its core namesake brand in more than a decade in 2015 as it battles to contain the damage from its emissions scandal.