MEXICO CITY -- The Mexican unit of Volkswagen AG on Monday said it would slash output by 23 percent and could cut up to 2,000 jobs because of slower demand for its models in export markets.
VW spokeswoman Christine Kuhlmeyer said the reductions would begin in August at the plant in Puebla, southeast of Mexico City.
"Sales of our models in export markets are below the planned levels, and that is why the decision was taken to modify the production plan," she told Reuters.
Output at the Puebla plant fell from a record of 425,000 units in 2000 to 332,876 units in 2002, and the decline has continued this year.
Output fell to 122,802 units in the first five months of the year, down 18.7 percent from the same period of 2002.
VW's Mexico plant exports 80 percent of its output, and sales have been hit by the worldwide slowdown in demand.
The Puebla plant's daily output is 560 New Beetles, 800 Jettas and 55 of the original Beetles, which will roll off the assembly line for the last time this year.
Kuhlmeyer said VW is looking at cutting up to 2,000 jobs and will negotiate the issue with trade union leaders in the coming weeks.
The company has 9,899 unionized employees, down from 10,500 at the end of last year.