Volvo Buses has made the decision to close its plant in Wroclaw, Poland, in Q1 of 2024. The facility, which produces electric buses and other vehicles, will be transitioned to Vargas Holding, a non-industry company, according to a recently signed letter of intent. Volvo will shift its focus to chassis production in Europe, a successful business model in other markets, in order to improve profitability and long-term competitiveness.
The President of Volvo Buses, Anna Westerberg, explained, “Our business in Europe has been loss-making for years. With this business model that we already today apply successfully in many markets, we will improve profitability and secure our long-term competitiveness.”
Approximately 1,600 jobs at Volvo Buses will be impacted by the decision to cease production of complete buses, with 1,500 of those jobs located in Wroclaw. Some employees will be offered employment with Vargas Holding.
While the move is expected to affect revenues in 2024 and 2025, Volvo is confident that this shift in focus will ultimately result in improved profitability. The restructuring provision of around 1.3 billion Swedish Krona (approximately $124 million) will negatively impact operating income in the first quarter of 2023.
In 2021, Volvo Buses introduced the BZL Electric, a new chassis designed for single- and double-decker electric buses with various options for bodybuilders. The powertrain was entirely developed by Volvo, and the manufacturer partnered with MCV in the UK and Ireland, who utilized the chassis as a base for two bus models.
This decision to close the Wroclaw plant will not impact the production of the BZL Electric chassis. Volvo Buses remains committed to producing high-quality, environmentally-friendly vehicles and will continue to innovate in the electric bus sector through its chassis production in Europe.
