Volkswagen halts operations at its Chinese factory - production has ceased
Volkswagen and its Chinese partner SAIC are planning to gradually shut down their joint manufacturing plant in Nanjing, China, during the second half of 2025. Production at this facility has already ceased.
The plant, which had been operating at a reduced capacity, assembling models like the VW Passat and the Skoda Superb, has been underutilized recently. The main reason cited for the closure is that converting the Nanjing plant to produce electric vehicles would be costly and inefficient due to its location close to the city center. This closure is part of Volkswagen's comprehensive strategic realignment to optimize its production network in China.
This will mark the first time Volkswagen completely shuts down an entire factory in China. Production formerly at the Nanjing plant will be relocated to a neighboring facility in Yizheng, about 70 kilometers away. The move reflects Volkswagen's response to the increasing competition in the Chinese auto market, particularly from domestic electric vehicle manufacturers.
Volkswagen plans to optimize and restructure its production footprint in China, focusing on efficiency and the growing electric vehicle market. The Nanjing site is expected to be returned to the city, indicating no future industrial use planned by Volkswagen at that location.
The report of the plant's closure was published by Handelsblatt. Volkswagen is intensifying collaborations with partners like SAIC and Xpeng in China to develop and market new EV models to regain competitiveness. The goal is to return the area around the Nanjing plant to the city after its closure.
- In light of the closure of the Nanjing plant, Volkswagen is likely to revise both its community policy and employment policy to accommodate workers affected by the relocation of production to the Yizheng facility.
- The shutdown of the Nanjing plant, coupled with Volkswagen's intensified collaborations with partners, signals a shift in the company's focus from traditional automotive manufacturing to the finance and development of electric vehicles within the Chinese market, necessitating changes in its industry and transportation strategies.
