Volkswagen and its Chinese partner, SAIC, are reportedly planning to close their joint venture plant in Nanjing, located in eastern China. According to a report in the Handelsblatt, citing individuals familiar with the matter, the move marks a significant shift in Volkswagen’s operations within the Chinese market.
Production at the Nanjing facility has reportedly ceased, with a gradual and phased closure anticipated during the second half of the year. This would constitute the first complete shutdown of a Volkswagen plant in China, a notable development for the automotive giant.
The plant, situated within the Jiangning Economic and Technological Development Zone, commenced operations in 2008, initially boasting an annual production capacity of 360,000 vehicles. It recently manufactured models including the Volkswagen Passat and Skoda Superb. Sources within Volkswagen suggest the plant’s central urban location presented challenges for renovations and logistics, while adapting the facility for electric vehicle production was deemed economically unfeasible. Remaining production is expected to be transferred to Volkswagen’s nearby Yizheng plant.
While a Volkswagen China spokesperson declined to comment specifically on the Nanjing plans, they did state that Volkswagen is continuously optimizing its production network in China. They indicated that alternative, economically-driven solutions are being explored in certain instances.
The decision to close the Nanjing facility is being viewed as indicative of the broader structural changes occurring within the Chinese automotive sector and highlights the intensifying competitive pressures Volkswagen faces from domestic electric vehicle brands such as BYD and Nio.