Volkswagen Main Factory In Nanjing China Officially Closed After 17 Years Of Operation

JAKARTA Germany's auto giant Volkswagen has confirmed the closure of one of its main factories in Nanjing, China, operated through a joint venture with SAIC. This decision marks a significant step in Volkswagen's global restructuring strategy amid rapid automotive market shifts, particularly the decline in demand for internal combustion vehicles (ICE).

The plant in Nanjing, reported Carscoops, Monday, July 14, has been operating for 17 years, has a production capacity of up to 360,000 units of cars per year and is responsible for production of popular models such as VW Passat and several Skolda models. The closure was first reported by a German newspaper and later confirmed by Volkswagen, although the exact date of the gradual closure has not been detailed, expected to take place in the second half of this year.

"We can confirm that the Nanjing SVW Factory has ended its production," Volkswagen said in a statement to Reuters earlier.

"Many SAIC VOLKSWAGEN locations are currently moderate or have been converted to electric vehicle production."

The fate of this factory has indeed been a question mark for some time. Since last September, news has emerged that the factory will be closed this year due to declining sales of gasoline-powered vehicles in the local market.

Volkswagen currently employs more than 90,000 people in China and operates 39 factories. However, the level of utilization in many of these locations has dropped dramatically since the COVID-19 pandemic. It is known that the total utilization rate in their joint venture factories with SAIC only operates at 58 percent of the maximum capacity of 2.1 million units.

Although several SAIC VOLKSWAGEN factories have been converted to support the production of electric vehicles, there has been no confirmation of whether the Nanjing plant will be one of them.