Volkswagen sells mill in Urumchi and test track in Turpan

The Volkswagen Group, together with Chinese partner SAIC, sold a car mill in Xinjiangu to Shanghai Motor Vehicle Inspection Certification (SMVIC), which is part of the state-owned Shanghai Lingang improvement Group.

At the same time, Volkswagen reported that its Chinese joint venture (from SAIC) intends to release 18 fresh models to the marketplace by 2030, including 2 extended-range models (EREV) for the Chinese market. These cars will appear on sale as early as 2026.

Despite the prevailing opinion that the German company "finally" has succumbed to global force and that is why it has disposed of a controversial mill in the region where human rights are to be violated, the reasons for the sale of the plant are more mundane.

Firstly, the mill has lost its importance in fresh years after its owner has reduced employment, due inter alia to problems in Europe and the fast request to cut costs. As a consequence, the plant producing 50,000 cars a year earlier, since 2019 it has not produced any car. This is related to a rapidly changing car policy in China, where, as the global Energy Agency reports, electrical vehicles can account for as much as 45% of full car sales in this year. It so seems logical that Volkswagen, who is in serious financial difficulties, is looking for real sources of income.

Secondly, the Xinjiangu plant, which focuses mainly on the production of diesel cars, is no longer on the list of priorities for the German company, at least in China. Volkswagen late announced that he was extending his 40-year joint venture with the Chinese SAIC Motor for the production of cars until 2040, and the number-one target, as quoted by the company's spokesperson, was to "accelerate the transformation of the production network" as "the request for vehicles with combustion engines falls".

As you can see, Volkswagen has consistently implemented its strategy “In China, for China”. In practice, this will mean introducing respective fresh models to the Chinese marketplace by 2030, including 8 electrical models.

It would be ironic if Germany, the author and promoter of the Green Deal policy, abandoned their belief in the electrification of cars in their European field, and it was coaxed in China, the largest CO2 emissary...

Source:
1. Die Welt, https://www.dw.com/en/volkswagen-to-exit-chinas-xinjiang-sell-factory
2. AP News, https://apnews.com/article/china-germany-vw-auto-tariffs

Written by Dr. Ewa Fronczak

Email: == sync, corrected by elderman ==

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