Volkswagen Exits Xinjiang, Sells Plant Amid Criticism

Volkswagen AG has announced its decision to sell its assembly plant in Xinjiang, China, amid mounting pressure from human rights groups regarding alleged forced labor practices affecting the Uyghur minority. The plant, which opened in 2012 in partnership with SAIC Motor Corp, has not produced vehicles since 2019 and will be sold to a Shanghai government-owned firm for undisclosed financial terms. Despite previous denials of any wrongdoing, the company cited economic reasons for the sale while extending its joint venture agreement with SAIC until 2040. Volkswagen has faced declining sales in China, dropping 12% in the first nine months of 2024, as competition from local manufacturers intensifies. The sale is part of a broader strategic realignment as Volkswagen seeks to enhance its presence in the Chinese market by introducing new electrified vehicle models. Human rights concerns continue to overshadow the company’s operations, with international scrutiny likely to persist.