Volkswagen Plans Plant Closure in Nanjing

Volkswagen and its Chinese joint venture partner SAIC Motor Corp are planning to close a factory in Nanjing next year due to declining sales of combustion-engine vehicles and the rise of electric vehicles (EVs) in China. This facility, which produces the VW Passat and Skoda models, has an annual capacity of 360,000 vehicles, but production has been significantly affected, with factory utilization at just 58%. The closure reflects VW's broader struggle in the Chinese market, where it has seen a drastic drop in market share and profits, with operating profit from joint ventures falling to less than one billion euros in the first half of 2024. While VW has stated it is transforming vehicle production to adapt to market demands, it faces tough competition from EV manufacturers like BYD and Tesla. The final decision on the Nanjing plant's closure is still uncertain, as discussions about relocating production and potential sales of the plant continue. VW's challenges highlight the complexities of transitioning from fossil fuels to more sustainable vehicle options in a rapidly changing automotive landscape.