Volkswagen's Factory Halt: Manufacturing Operations Already Suspension
Volkswagen and its Chinese partner, SAIC, have announced the closure of their joint plant in Nanjing, China. The decision comes as the company aims to optimize its production network for its electric vehicle (EV) strategy [1][2].
The Nanjing plant, operated by the joint venture Shanghai Volkswagen since 2008, has reached an annual production capacity of 300,000 vehicles in 2011 [3]. Models such as the VW Passat and the Skoda Superb were produced at the Nanjing plant. However, the plant's central urban location has limited its potential for expansion and costly EV production upgrades, making it unsuitable for the transition to electric mobility [1][2].
The closure is part of Volkswagen's transformation to electric vehicles. The company aims to implement a new "China Electronic Architecture" (CEA) for its locally produced fully electric vehicles starting in 2026 [1][2]. This shift underscores a move away from legacy models towards a digitally advanced EV lineup.
The partnership with SAIC continues, focusing increasingly on EV development and production efficiency. Despite the closure, Volkswagen and SAIC will continue their collaboration until 2040 [1][2].
Volkswagen faces intense competitive pressure in China, particularly in the EV segment, where local manufacturers such as BYD are rapidly expanding. Despite a slight decline in overall sales in early 2025, Volkswagen is preparing to re-enter the Chinese EV market more aggressively with new EV models, leveraging the new production facilities better suited for electric vehicle manufacturing [2][3][4].
The final closure of the Nanjing plant will take place gradually in the second half of the year. This is the first full closure of a VW plant in China, marking a significant step in Volkswagen's journey towards a future-oriented, electric-focused production network [1][2][4].
References:
- Volkswagen and SAIC to close Nanjing plant in China
- Volkswagen to close Nanjing plant, focus on electric vehicle production
- Volkswagen's Nanjing plant: From 300,000 vehicles in 2011 to closure
- Volkswagen to close Nanjing plant, shifting focus to electric vehicles
The closure of the Nanjing plant, a joint venture between Volkswagen and SAIC, signals a shift towards optimized electric vehicle (EV) production networks for both companies. Despite the closure, Volkswagen and SAIC aim to collaborate on electric vehicle (EV) development and production efficiency until 2040. As competition in China's EV market escalates, Volkswagen plans to re-enter with new EV models, leveraging future production facilities better suited for electric vehicle manufacturing.
