VW, SAIC to Close Plant Amid Shrinking Sales in China

19 Sep, 2024

VW, SAIC to Close Plant Amid Shrinking Sales in China

Volkswagen, in collaboration with its Chinese joint venture partner SAIC, is set to close at least one plant in China due to a downturn in demand for combustion engine vehicles. According to Bloomberg News, the Nanjing facility, which manufactures VW Passat and Skoda models, is the first plant slated for closure, potentially as soon as next year.

Volkswagen has yet to confirm the reports, stating that it does not comment on speculation. Similarly, SAIC has not provided any immediate feedback on the situation. The closure reflects Volkswagen’s struggle to maintain its dominance in the Chinese automotive market, where it has seen a decline in market share. The company is attempting to regain its footing by collaborating with SAIC and other partners, such as Xpeng, to introduce new models that may better compete in the evolving market.

Recent reports indicate that SAIC plans to reduce its workforce by 10% this year, reflecting broader challenges faced by the company as it contends with a significant drop in sales. The rise of competitors like BYD and Tesla, who have made substantial gains in the electric vehicle market, has intensified the pressure on traditional automakers like Volkswagen.