Volkswagen To Shut Down Xinjiang Operations, Extend Partnership With SAIC Till 2040

The automaker announced the decision after facing immense pressure for years to shut down its presence in the area where rights groups have documented abuses against the Uyghur population

Notably, the Xinjiang plant opened in 2013 and earlier assembled the carmaker’s Santana vehicle.

Source : Volkswagen

Volkswagen on Wednesday said that it is planning to divest all its operations in China’s Xinjiang. The automaker announced the decision after facing immense pressure for years to shut down its presence in the area where rights groups have documented abuses against the Uyghur population.

At the same time, the automaker also announced that it will extend its partnership with the Chinese firm SAIC by a decade to 2040, reported Reuters. VW and SAIC informed that they will sell their plant in Xinjiang to Shanghai Motor Vehicle Inspection Certification (SMVIC), a unit of state-owned Shanghai Lingang Development Group and that the new entity will take over the entire workforce of the plant.

As part of the deal, financial details were not revealed by the firms. The test tracks of both the firms in Turpan, Xinjiang and Anting in Shanghai will be taken over by SMVIC and post the deal, the automaker will not have a presence in the region.

Notably, the Xinjiang plant opened in 2013 and earlier assembled the carmaker’s Santana vehicle. However, the significance of the plant shrank in recent years after the company reduced jobs, leaving behind 200 employees to conduct final quality inspections and hand over the vehicles to the dealers in the area.

The plant earlier had capacity to manufacture 50,000 units annually, however, it hasn’t produced any vehicles since 2019.

The automaker has rejected reports that it maintained the plant open on condition from the Chinese government to keep producing across China. The company on Wednesday said that this decision to close the plant was being made for economic reasons.

The firm is also collaborating with other Chinese companies such as Xpeng to develop more models which are suitable for Chinese consumers and plans to manufacture more than 30 new electric or hybrid vehicles by the end of the decade.