Report: German carmaker VW to sell plant in China’s Nanjing

Germany’s Volkswagen Group is planning to sell its plant in the Chinese city of Nanjing to the north-west of Shanghai, the German business weekly Wirtschaftswoche reported on Saturday.

Citing company sources, the weekly said a decision had already been taken. The carmaker preferred to sell the plant, but simply shutting it down was also an option, it reported. Volkswagen declined to comment.

The plant was set up in 2008 in cooperation with Volkswagen’s Chinese partner SAIC. Production capacity is 360,000 cars per year focusing on Volkswagen’s Passat and Škoda’s Kamiq and Superb models.

Volkswagen sources in Beijing told dpa that plans to sell the plant had been under consideration for some time as a result of under-utilization. Another factor was the lack of options in adjusting production at the plant, which lies in a relatively central location in the city.

At the end of November, Volkswagen announced that it was withdrawing from its controversial involvement in the north-western Xinjiang region, with its predominantly Uyghur population. Volkswagen said it had sold its Urumqi plant there, where SAIC was also a partner.

Volkswagen said the decision had been taken on economic grounds, but the location had also come in for criticism on account of reports of repression of the Uyghur minority.

Wirtschaftswoche reported that Volkswagen could dispose of more of its 26 Chinese plants as a result of overcapacity. Plants making Škoda models were at risk, as sales of the brand were in free-fall, Volkswagen sources told the weekly.

Volkswagen is also considering shuttering at least three German plants, according to the works council.