Volkswagen is planning to stop production at one of its combustion engine car plants in China, a person with direct knowledge of the matter said, in a sign of the carmakers' struggles to manage overcapacity in the world's biggest car market.
The carmaker, with its joint venture (JV) partner SAIC Motor, will gradually shift production of its Passat family cars from the Nanjing plant to a nearby factory in the same eastern province of Jiangsu, the person said.
The JV has no definitive timetable for the move and has not yet decided whether it would close the factory or put it on sale, the person added.
Some workers at the Nanjing factory would be told to relocate to work in SAIC-VW's Yizheng plant, which makes the brand's best-selling Lavida sedans, the person said.
The two are also mulling plans to revive the sales of Skoda, the two people said. The brand only makes up 1% of the total SAIC-VW sales while in 2018 it accounted for 17%.
Bloomberg News first reported on Wednesday the two companies' plans to close two factories of Nanjing and Ningbo.
Volkswagen said it does not comment on speculation. SAIC was not immediately available for comment.
Two sources denied the JV partners plan to close the Ningbo plant, its largest after its three factories in Shanghai.
Volkswagen, long the top-selling carmaker in China, is suffering from a decline in its market share in the country and is working with SAIC and other partners such as Xpeng to bring new models on the market it hopes will be more competitive.
Reuters reported earlier this year SAIC aimed to cut 10% of jobs in 2024 at SAIC Volkswagen and other partners, facing steep drops in sales. The VW-SAIC JV sold 1.2-million cars in 2023, down 43% from its peak in 2017.
VW plans stop to production at jointly-owned China plant
Image: Sean Gallup/Getty Images
Volkswagen is planning to stop production at one of its combustion engine car plants in China, a person with direct knowledge of the matter said, in a sign of the carmakers' struggles to manage overcapacity in the world's biggest car market.
The carmaker, with its joint venture (JV) partner SAIC Motor, will gradually shift production of its Passat family cars from the Nanjing plant to a nearby factory in the same eastern province of Jiangsu, the person said.
The JV has no definitive timetable for the move and has not yet decided whether it would close the factory or put it on sale, the person added.
Some workers at the Nanjing factory would be told to relocate to work in SAIC-VW's Yizheng plant, which makes the brand's best-selling Lavida sedans, the person said.
The two are also mulling plans to revive the sales of Skoda, the two people said. The brand only makes up 1% of the total SAIC-VW sales while in 2018 it accounted for 17%.
Bloomberg News first reported on Wednesday the two companies' plans to close two factories of Nanjing and Ningbo.
Volkswagen said it does not comment on speculation. SAIC was not immediately available for comment.
Two sources denied the JV partners plan to close the Ningbo plant, its largest after its three factories in Shanghai.
Volkswagen, long the top-selling carmaker in China, is suffering from a decline in its market share in the country and is working with SAIC and other partners such as Xpeng to bring new models on the market it hopes will be more competitive.
Reuters reported earlier this year SAIC aimed to cut 10% of jobs in 2024 at SAIC Volkswagen and other partners, facing steep drops in sales. The VW-SAIC JV sold 1.2-million cars in 2023, down 43% from its peak in 2017.
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