China Is Interested In Purchasing VW’s Closed Factories

Chinese officials and automakers are seriously considering buying German factories that could be closed and are particularly interested in Volkswagen plants.

Buying the factory from Volkswagen would allow China to build influence in the venerable German auto industry, which is home to some of the oldest and most prestigious car brands.

Chinese companies have invested in a range of industries in Europe’s largest economy, from telecommunications to robotics, but have yet to establish traditional car manufacturing in Germany, despite Mercedes-Benz already having two major Chinese shareholders.

Such a move could be the most politically sensitive Chinese investment to date. Volkswagen has long been a symbol of German industrial power, and now there are obvious signs of a global economic slowdown that is affecting demand but also the rapid transition to “green” technologies.

Producing cars in Germany for sale in Europe would allow Chinese electric vehicle manufacturers to avoid paying EU tariffs on electric cars imported from China and could pose a further threat to the competitiveness of European manufacturers.

While bids can come from private companies, state-owned enterprises, or joint ventures with foreign players, Chinese authorities reserve the right to approve certain overseas investments and are likely to be involved in any bid from the very beginning of the process.

Investment decisions would depend on the new German government’s stance on China after elections in February. The two economic powers have become deeply intertwined during Angela Merkel’s 16 years in power, boosted by investment and German car exports to China.

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