Volkswagen, JV Partner SAIC Plan To Close China Plant - Report

Volkswagen and its Chinese partner SAIC are considering the closure of a plant in the People's Republic because of the decline in demand for combustion engine vehicles.
Production of Passat models will move from Nanjing to a nearby factory, a person with knowledge of the situation told the Reuters news agency on Wednesday. According to the insider, some Nanjing workers would also be moved to the other plant.
The facility can produce up to 360,000 Volkswagen Passat and Skoda vehicles annually. With one plant having already stopped production and the other slowing down, SAIC Volkswagen may soon close both of its plants.
Volkswagen, which was once the best-selling automaker in China, is attempting to increase its market share there by collaborating with SAIC and other partners like Xpeng to introduce new models that it hopes will be more competitive.


The German automaker is having difficulty keeping up with rising expenses and fiercer competition from Chinese automakers like BYD Co. and Tesla Inc. Following a warning that it might have to close plants in Europe's largest economy for the first time, the company eliminated three decades' worth of job protections earlier this month in Germany.
According to the sources, the two are also considering strategies to increase Skoda sales. In 2018, the brand accounted for 17% of all SAIC-VW sales, whereas it only makes up 1% now.