Volkswagen and its Chinese partner, SAIC, are reportedly planning to close their joint venture facility in Nanjing, located in eastern China. The development, first reported by “Handelsblatt” citing multiple sources familiar with the matter, signals a significant shift in Volkswagen’s operations within the Chinese market.
Production at the Nanjing plant has reportedly already ceased, with a phased closure expected to be completed during the second half of the year. This would mark the first complete closure of a Volkswagen manufacturing facility in China.
The Nanjing plant, situated within the Jiangning Economic and Technological Development Zone, commenced operations in 2008 boasting an annual production capacity of 360,000 vehicles. It has most recently been responsible for the production of the Volkswagen Passat and Skoda Superb models. Internal sources suggest that the plant’s urban location presented logistical challenges, limiting potential renovations and making the costly transition to electric vehicle production economically unfeasible. Existing production lines are slated to be transferred to the nearby Yizheng facility.
The decision to close the Nanjing plant is being viewed by analysts as a demonstration of the structural changes underway within the Chinese automotive sector and reflects the increasing competitive pressure Volkswagen faces from domestic electric vehicle manufacturers such as BYD and Nio.
Volkswagen China declined to provide specific commentary regarding the Nanjing plans, stating that the company is continually optimizing its production network in China. They indicated that the evaluation of economic alternatives is being undertaken in select circumstances.
