- VW confirms closure of its SAIC joint venture factory located in Nanjing, China.
- The site produced VW Passat and Skoda models with a capacity of 360,000 cars.
- Closure comes amid declining demand for ICE models and low factory utilization.
While global carmakers scramble to realign their operations, Volkswagen is pulling the plug on a major Chinese factory. After cutting a deal with Germany’s IG Metall union last year to keep a few domestic plants running, the company has now confirmed it’s shutting down a longtime joint-venture site in Nanjing.
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The facility, run with partner SAIC, has been cranking out cars for 17 years and has the capacity to produce 360,000 vehicles a year.
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News of the closure first emerged from a German newspaper. Not long after, Volkswagen confirmed the move, but did not specify when the closure will take place. According to Handelsblatt, it will be shut during gradually during the final half of the year.
“We can confirm that SVW Nanjing Plant has ended production,” VW confirmed in a statement to Reuters. “Many SAIC VOLKSWAGEN sites are currently being converted or have already been converted for electric vehicle production.”
The future of the factory had been hanging in the balance for quite some time. Last September, it was revealed that it would close this year due to the declining local sales of combustion-powered vehicles. It had been handling the production of the VW Passat and several Skoda models at the time.
Volkswagen employs more than 90,000 people in China and operates 39 factories. But, the utilization rates at many of these sites have fallen significantly since COVID-19. It’s understood that total utilization at its factories with joint venture partner SAIC was operating at just 58 percent of a possible 2.1 million units.
The statement released by VW noted that some of its plants with SAIC have already been converted to support EV production, but didn’t specify if the Nanjing site will be one of them.
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