Volkswagen plans to stop production at one of its plants operated through its joint venture with SAIC in China, a plant that makes cars with internal combustion engines.
Specifically, the factory manufactures the VW Passat as well as many Skoda models and has an annual production capacity of up to 360,000 cars. For now there is no decision on whether the factory will be closed completely or put up for sale.
The reason for this decision is the drop in sales of cars produced by the plant in question, with the VW-SAIC joint venture moving Passat production from the Nanjing city plant to another nearby plant in Yizheng city in the same eastern province Jiangsu.
Some workers from the Nanjing plant will be transferred to the Yizheng plant, which currently makes the Lavida, the joint venture’s best-selling model.
At the same time, VW and SAIC are looking at ways to increase Skoda sales, which now represent just 1% of VW-SAIC’s total sales, while in 2008 they represented 17%.
Volkswagen, long the best-selling carmaker in China, has been suffering from declining market share in the country and is working with SAIC and other partners such as Xpeng to bring new models to market that it hopes will be more competitive.
VW employs more than 90,000 people in China and operates 39 factories. However, production at these facilities has fallen more than 25% since the peak before the COVID-19 pandemic and has roughly halved since 2015. Additionally, plant utilization at the SAIC-VW joint venture is just 58% from the maximum production capacity of 2.1 million units.
Source: www.autoblog.gr
