Berlin – Chinese automakers and representatives of China are interested in factories to be closed in Germany, especially Volkswagen factories. This was reported by the Reuters agency, citing a source familiar with the interests of the Chinese government. Buying the factory would allow China to gain influence in Germany’s renowned auto industry, which is home to some of the oldest and most prestigious car brands, the source added.
Chinese companies have invested in Germany, Europe’s largest economy, in a range of sectors from telecommunications to robotics. But they have not yet started car production there, even though Mercedes-Benz has two major Chinese shareholders. Any such move could mark China’s most politically sensitive investment to date. Long a symbol of German industrial sophistication, Volkswagen is now threatened by a global economic slowdown that has hit demand and a troubled transition to green technologies.
Manufacturing cars in Germany would allow Chinese electric car makers to avoid paying EU tariffs on electric cars imported from China. It could thus represent another threat to the competitiveness of European manufacturers.
Bids for the factories could be from private firms, state-owned firms or joint ventures with foreign companies. However, Chinese authorities reserve the right to approve certain investments abroad and would likely be involved in any bid from the outset.
However, the source also pointed out that the investment decision will also depend on the attitude of the new German government, which will emerge from the February elections, towards China. The economies of both countries became deeply intertwined during the 16 years of Angela Merkel’s government, which was helped by the investments of German car companies in China. However, relations have cooled as the current governing coalition seeks to reduce dependence on China.
Volkswagen is exploring alternative uses for its factories in Dresden and Osnabrück as part of its plan to cut costs and scale back its German activities. Europe’s largest carmaker, which also owns brands such as Porsche, Audi and Škoda, saw a drop in sales last year due to growing competition from Chinese companies. The management of Volkswagen originally wanted to close several plants in Germany, but encountered opposition from the trade unions. Before Christmas, the company agreed with the unions that this year it will end production in Dresden, where it has 340 employees and produces the ID.3 electric car, and in 2027 it will end production in Osnabrück, where 2,300 employees make the T-Roc Cabrio model.
But Chinese firms are worried about how they would be received by German unions, which hold half the seats on German companies’ advisory bodies and are seeking far-reaching guarantees on factories and job guarantees, the source added. Osnabrück plant union representative Stephan Soldanski said workers at the plant would not mind producing for one of Volkswagen’s joint venture partners, under the VW logo and to VW standards.
According to one of the bankers familiar with the car company’s activities, selling the factories could be cheaper for VW than closing them completely. According to him, the car company could receive 100 million to 300 million euros (2.5 billion to 7.6 billion CZK) for each of the factories.
A number of Chinese automakers are looking for sites for their plants in Europe, the world’s second-largest market for electric cars. In this way, they want to bypass the duties that the European Commission introduced last year on the import of electric cars made in China due to what it considers unfair subsidies from the Chinese government. So far, most Chinese companies have chosen to build new factories in countries with lower costs and weaker unions, such as BYD in Hungary and Turkey. Leapmotor plans to build with Stellantis in Poland, and Chery Auto wants to build electric cars in Spain at a plant formerly owned by Nissan. According to the source, Chinese investors have also already inspected some closed factories in Western Europe, such as the Ford plant in Saarlouis, Germany, and the Audi plant in Brussels.
China Germany automoto Volkswagen company
Source: www.ceskenoviny.cz
