The struggles continue for global automakers in China. After halting production, Volkswagen announced it will close a plant in China. And that’s not all, another OEM is filing for bankruptcy through its joint venture.
Volkswagen is closing a plant in China later this year
Although it may not seem significant, China is one of, if not the most important, markets for Volkswagen, accounting for around 30% of its deliveries.
Volkswagen has already halted production at its manufacturing plant in Nanjing and plans to close it officially later this year.
The Nanjing facility was opened by VW’s joint venture, SAIC Volkswagen, in 2008. It’s the German brand’s fourth auto plant in China, producing popular gas-powered vehicles like the Passat and Skoda Superb. Although it can build over 360,000 vehicles a year, output is lagging amid slower sales.
A Volkswagen spokesperson confirmed (via Reuters) that “SVW Nanjing Plant has ended production,” and it will close its doors in the second half of the year.
The spokesperson added that “many SAIC VOLKSWAGEN sites are currently being converted or have already been converted for electric vehicle production.” VW will move production of its flagship Passat to a nearby plant in the same eastern province (Jiangsu).
In the first half of 2025, SAIC Volkswagen sold 523,000 vehicles, up 2.3% compared to last year. New electric cars, including the ID.4X Smart Edition, 2025 ID.3 Smart Edition, and ID.3 GTX, are now rolling out.
Later this year, SAIC VW will launch the Audi E5 Sportback, the first EV based on its new Advanced Digitized Platform, offering up to 770 km (478 miles) CLTC range.
Despite the market shifting to EVs, the brand said it will continue promoting “oil and electricity” together. It will continue to produce gas-powered cars, such as the Passat, Lavida, Tiguan, and T-Roc.
The company said that 2026 will be the “product year” for new energy vehicles (NEV) and intelligent vehicles. By 2030, SAIC Volkswagen plans to launch over 20 new vehicles, including EVs, extended-range electric vehicles (EREVs), and plug-in hybrids (PHEVs).
Although the Volkswagen plant closure is a blow, another global automaker may be in a worse position in China. Jeep maker Stellantis is filing for bankruptcy through its joint venture with GAC Group, GAC-FAC.
Stellantis and GAC announced plans to end the joint venture in July 2022. Since October of the same year, all Jeep brand vehicles sold in China have been imports.
Electrek’s Take
As global automakers continue falling behind, China’s leading EV makers, like BYD, are gaining market share. BYD topped Volkswagen to become the best-selling car brand in China in 2023. Since then, the Chinese EV giant has widened its lead.
After selling over 382,500 vehicles in June alone, BYD’s sales for the year have now surpassed 2.1 million, representing a 33% increase compared to the first half of 2024.
And BYD is not the only one. Xpeng, NIO, Xiaomi, and plenty of others are launching longer-range, more advanced electric vehicles, squeezing global OEMs out of the market. Now, they are expanding overseas. Can legacy brands keep up? With next-gen models arriving soon, things could get interesting.
Source: Nikkei, CarNewsChina
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