Volkswagen could sell factories to Chinese manufacturers

The leak comes from the Reuters agency, but the decision will come in February at the latest, after the German elections.

The Volkswagen logo on the ID.3

By: Riccardo Ciriaco

Published by: Brian Potter

Jan 18, 2025 at 4:44am ET

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China's eyes are once again on Europe. This time, the Asian manufacturer's sights are set on the Volkswagen plants that are to be closed in the midst of the company's crisis, in accordance with the agreement painstakingly reached between the group and the German trade unions before Christmas.

According to Reuters, these are the plants in Dresden (which employs 340 people to produce the electric ID.3, but only until the end of this year) and in Osnabrück (where the company employs 2,300 people to produce the T-Roc Convertible, until 2027).

Unprecedented

For the as-yet-unknown Oriental manufacturers, landing in Germany would represent both an opportunity to expand further in the Old Continent (especially in light of the new additional import duties on vehicles made in China, which would thus be circumvented), and a highlight in the panorama of car production.

For the still-unknown Eastern manufacturers, landing in Germany would be both an opportunity to expand further on the Old Continent (especially in view of the new additional import duties on vehicles made in China, which would be circumvented) and become a new player on the car production scene.

Volkswagen ID.3 77 kW 2024

Volkswagen ID.3, produced in Dresden

Volkswagen ID.3 77 kW 2024

Three-quarter back right

So far, Chinese manufacturers from the Urals have preferred to build new plants rather than buy existing ones. One example is BYD in Hungary and Turkey. In recent months, however, there have been rumours of interest in endangered plants such as Nio and the Audi complex in Brussels.

Pros and cons

For their part, Volkswagen and the unions would seriously evaluate any proposals from Beijing and the surrounding area. The best, from the Germans' point of view, would be from partners with whom the group has joint ventures in China.

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'I could imagine that we would produce something for a Chinese JV, but under the VW logo and according to VW standards. That is the key condition,' are the words of Stephan Soldanski, union representative in Osnabrück.

The sale would yield between €100 and €300 million. However, it has to be considered that the group also envisages alternative uses for the plants and that the decision will also depend on the influence of the new government in Berlin. The vote will be on Sunday, 23 February.

Chinese and European production:

Volkswagen may close its Nanjing factory in China

Dongfeng suspends plans to produce cars in Italy

China's GAC also wants to produce in Europe

How China has become a problem for Western carmakers

Source: Reuters

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