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Volkswagen Ponders Closing Its Chinese Factory Due To Lack Of Demands
Volkswagen is reportedly planning to close a Chinese factory of its joint venture SAIC-Volkswagen because there is not enough demand for the cars produced there.
The factory in question is that of SAIC-VW, the oldest of Volkswagen’s three joint ventures in China. The factory in Nanjing has a capacity of 360,000 cars per year. At the moment, the Skoda Kamiq and Skoda Superb are rolling off the production line, but especially a Volkswagen PassatVo that is very different from the version we know in Europe. So for once, it is not a matter of closing an EV factory, but of a factory that builds cars with combustion engines.
According to insiders Bloomberg spoke to, a concrete plan for executing the wish to close this plant is still being worked on. Passat production would then be transferred to another plant in the region. A larger plan is said to be in the works for the Skoda brand because the share of the Czech brand in SAIC-Volkswagen’s sales is said to have fallen from 17 percent in 2018 to 1 percent now. Incidentally, the JV as a whole has also done better: SAIC-VW sold 1.2 million cars in 2023, 43 percent less than in 2017.
Incidentally, the VW-SAIC Passat was recently introduced in a new form. If Volkswagen is planning to move the model’s production elsewhere, now seems like the ideal time.
The poor sales results are a major cause of the problems Volkswagen is currently experiencing. For a long time, sales declines in Europe could be offset by good results from the world’s largest car market, but the market is also shrinking and it has become more difficult to maintain market share.
