Volkswagen reorganizes production in China

Volkswagen is reorganising its production in China. While early information remains sparse, space is to be created for production of electric cars by bundling production. Among other things, the assembly of combustion models is to be relocated from the Anting plant to other sites.

This is reported by the German publication Handelsblatt, among others, with reference to a company spokesperson. The restructuring is to affect both VW's component and vehicle production in China, however, details are scarcely known. However, it is certain that SAIC Volkswagen's main plant in Anting, which consists of four parts, will in future be based on only three parts.

Volkswagen revealed the plans after posts on social media portals in China speculated about the closure of the factory. It remains unclear where the internal combustion engine production will be relocated from Anting. Volkswagen only stated that "the move will not affect the production capacities of individual models" and that "the relocation underscores efforts to accelerate the shift to e-mobility".

Volkswagen is currently losing its market share in China. In 2022, the German manufacturer delivered only 3.18 million vehicles (across all drive types) in the People's Republic. According to Handelsblatt, VW's plants in China are far from running at full capacity since the corona pandemic: "According to data from the industry service Marklines, the SAIC plants alone would have capacities for around 2.27 million vehicles annually. Last year, however, capacity was only needed for about 1.34 million cars," writes the German paper.

A few weeks ago, they announced a new development centre for electric cars in Hefei, China, in order to bring new electric cars to market in China more quickly and in line with the requirements of Chinese customers. Around one billion euros is to be invested in the facility. It is not a classic R&D centre, where mainly engineers work, but a "new centre for development, innovation and procurement for fully networked electric cars", the company headquarters said in April. The new company with the project name "100%TechCo" will combine vehicle and component development as well as procurement. According to Volkswagen, this will reduce the development time for new products and technologies by about 30 per cent.

Currently, the Volkswagen Group produces electric cars based on the MEB platform in three Chinese factories: in Anting (SAIC-VW), in Foshan (FAW-VW) and, since 2022, also in Anhui (formerly JAC-VW). The latter differs from Anting and Foshan: firstly, the Wolfsburg-based company took over the majority of the JAC-Volkswagen joint venture in 2020 and renamed it Volkswagen Anhui – VW thus controls the plant, in contrast to the partnerships with SAIC and FAW. And it is said to be the VW plant with the highest level of automation in China – over 900 robots have been installed in the 140,000 square metre facility.

handelsblatt.com, reuters.com

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