**Volkswagen (VOW3): While the union tightens its stance, BYD arrives in Dresden**
By Ion Jauregui – Analyst at ActivTrades
Volkswagen (VOW3) is once again at the center of the European market focus following recent reports on a potential industrial collaboration with BYD in Germany and growing tension between the group’s management and German trade unions.
The German manufacturer is going through one of its most challenging periods in recent years. The slowdown in demand in Europe, strong Chinese competition in electric vehicles, and the threat of new US tariffs are forcing the company to rethink its industrial structure.
## The union maintains its “red line”
According to Reuters, Volkswagen’s union representatives have reiterated their absolute rejection of plant closures in Germany, maintaining a firm stance against the restructuring plans pushed by group management.
The company is seeking to reduce production capacity to improve efficiency and protect margins, particularly in a context where the European industry is facing overcapacity against weaker demand.
However, IG Metall and the works council consider that any factory closures would represent a direct threat to German industrial employment, increasing political and social pressure on the manufacturer.
## BYD and the Dresden plant
At the same time, the market remains highly attentive to reports regarding BYD’s interest in partially using the historic Dresden plant, known as the *Gläserne Manufaktur*.
The factory stopped producing the ID.3 and currently some of its facilities have limited activity, which has fueled speculation about possible industrial agreements between Volkswagen and Chinese manufacturers.
Although Volkswagen has officially denied the existence of a definitive agreement, the possibility reflects the profound structural shift taking place in the European automotive sector. A few years ago, it would have been unthinkable for Chinese manufacturers to operate within historic German group facilities.
BYD’s potential entry also highlights the growing competitive pressure from China on European automakers, particularly in the EV segment, where Asian groups maintain significant advantages in production costs and battery development.
## The threat of US tariffs
This situation is further complicated by the commercial risk coming from the United States. The threat of imposing 25% tariffs on European automobiles could seriously affect German manufacturers such as Volkswagen, especially at a time when the sector is already facing margin deterioration and slower global growth.
The market fears that these trade tensions could force European companies to further accelerate industrial restructuring and cost-cutting processes.
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## Technical analysis of VOW3
From a technical perspective, VOW3 continues to show a medium-term sideways structure after finding a double technical support in the impulsive zone formed in December 2024. The stock is currently trading within a wide consolidation range between €82.66 as key support and €98.76 as major resistance, while the most recent high remains at €109.15 recorded in December 2025. The uncertainty around the electric transition, combined with margin pressure and industrial costs, continues to limit the stock’s ability to develop a sustained bullish trend.
On the daily chart, a point of control zone stands near €91, where price action appears to have stabilised after recent volatility phases. The bearish moving average crossover remains in place, although the price has managed to trade sideways around the 50-day moving average, showing some short-term stabilisation.
In terms of indicators, RSI remains in neutral territory after recovering from oversold levels, while MACD is still below the zero line, although with a positive histogram, suggesting fading selling pressure without a clear return of bullish momentum.
Key resistance levels remain concentrated around the psychological €100 area, where institutional selling and profit-taking have previously emerged. On the downside, the €82–83 support zone remains the critical level to preserve the current medium-term sideways structure.
On the other hand, the ActivTrades Europe Market Pulse indicator showed a clear “risk-on” environment in previous weeks, driven by strong corporate earnings in Europe, supporting upside moves in companies such as Volkswagen. However, in the current session, the indicator has shifted back to a neutral reading, reflecting a more cautious market stance amid macroeconomic and sector uncertainty.
From a fundamental perspective, the potential rapprochement between Volkswagen and BYD at the Dresden plant adds a relevant strategic dimension. Although there is still no confirmed agreement, the market interprets this potential collaboration as a sign of industrial pragmatism: optimisation of underutilised capacity in Europe and indirect entry of Chinese manufacturers into the German production ecosystem. If materialised, this factor could act as an additional medium-term catalyst for the stock.
In the coming months, investors will remain focused on industrial agreements, union pressure, and the impact of US tariffs, all of which could define the next directional move for VOW3.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success.
By Ion Jauregui – Analyst at ActivTrades
Volkswagen (VOW3) is once again at the center of the European market focus following recent reports on a potential industrial collaboration with BYD in Germany and growing tension between the group’s management and German trade unions.
The German manufacturer is going through one of its most challenging periods in recent years. The slowdown in demand in Europe, strong Chinese competition in electric vehicles, and the threat of new US tariffs are forcing the company to rethink its industrial structure.
## The union maintains its “red line”
According to Reuters, Volkswagen’s union representatives have reiterated their absolute rejection of plant closures in Germany, maintaining a firm stance against the restructuring plans pushed by group management.
The company is seeking to reduce production capacity to improve efficiency and protect margins, particularly in a context where the European industry is facing overcapacity against weaker demand.
However, IG Metall and the works council consider that any factory closures would represent a direct threat to German industrial employment, increasing political and social pressure on the manufacturer.
## BYD and the Dresden plant
At the same time, the market remains highly attentive to reports regarding BYD’s interest in partially using the historic Dresden plant, known as the *Gläserne Manufaktur*.
The factory stopped producing the ID.3 and currently some of its facilities have limited activity, which has fueled speculation about possible industrial agreements between Volkswagen and Chinese manufacturers.
Although Volkswagen has officially denied the existence of a definitive agreement, the possibility reflects the profound structural shift taking place in the European automotive sector. A few years ago, it would have been unthinkable for Chinese manufacturers to operate within historic German group facilities.
BYD’s potential entry also highlights the growing competitive pressure from China on European automakers, particularly in the EV segment, where Asian groups maintain significant advantages in production costs and battery development.
## The threat of US tariffs
This situation is further complicated by the commercial risk coming from the United States. The threat of imposing 25% tariffs on European automobiles could seriously affect German manufacturers such as Volkswagen, especially at a time when the sector is already facing margin deterioration and slower global growth.
The market fears that these trade tensions could force European companies to further accelerate industrial restructuring and cost-cutting processes.
---
## Technical analysis of VOW3
From a technical perspective, VOW3 continues to show a medium-term sideways structure after finding a double technical support in the impulsive zone formed in December 2024. The stock is currently trading within a wide consolidation range between €82.66 as key support and €98.76 as major resistance, while the most recent high remains at €109.15 recorded in December 2025. The uncertainty around the electric transition, combined with margin pressure and industrial costs, continues to limit the stock’s ability to develop a sustained bullish trend.
On the daily chart, a point of control zone stands near €91, where price action appears to have stabilised after recent volatility phases. The bearish moving average crossover remains in place, although the price has managed to trade sideways around the 50-day moving average, showing some short-term stabilisation.
In terms of indicators, RSI remains in neutral territory after recovering from oversold levels, while MACD is still below the zero line, although with a positive histogram, suggesting fading selling pressure without a clear return of bullish momentum.
Key resistance levels remain concentrated around the psychological €100 area, where institutional selling and profit-taking have previously emerged. On the downside, the €82–83 support zone remains the critical level to preserve the current medium-term sideways structure.
On the other hand, the ActivTrades Europe Market Pulse indicator showed a clear “risk-on” environment in previous weeks, driven by strong corporate earnings in Europe, supporting upside moves in companies such as Volkswagen. However, in the current session, the indicator has shifted back to a neutral reading, reflecting a more cautious market stance amid macroeconomic and sector uncertainty.
From a fundamental perspective, the potential rapprochement between Volkswagen and BYD at the Dresden plant adds a relevant strategic dimension. Although there is still no confirmed agreement, the market interprets this potential collaboration as a sign of industrial pragmatism: optimisation of underutilised capacity in Europe and indirect entry of Chinese manufacturers into the German production ecosystem. If materialised, this factor could act as an additional medium-term catalyst for the stock.
In the coming months, investors will remain focused on industrial agreements, union pressure, and the impact of US tariffs, all of which could define the next directional move for VOW3.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.