The Chinese Automakers’ Takeover: Eyeing Volkswagen’s Factory

According to Reuters, a source familiar with the Chinese government shared that buying factories in Germany would allow China to increase its influence in Germany’s prestigious automotive industry, home to some of the oldest and most respected car brands.

Chinese companies have invested in various industries in Germany – the largest economy in Europe, from telecommunications to robotics, but have yet to establish traditional automotive manufacturing bases there, even though Mercedes-Benz has two large shareholders from China.

Producing cars in Germany for sale in Europe would allow Chinese electric vehicle manufacturers to avoid EU tariffs on imported electric vehicles from China while potentially posing a greater threat to European manufacturers.

Volkswagen has long been a symbol of Germany’s industrial might, but it is now threatened by the global economic downturn and a challenging transition to green vehicles.

Volkswagen is seeking alternative uses for its Dresden and Osnabrueck plants as part of a cost-cutting drive to streamline operations in Germany. The largest automaker in Europe, which owns brands including Porsche, Audi, and Skoda, has seen sales decline amid increasing competition from Chinese companies.

VW executives want to close some factories, but this plan faces opposition from unions. In an agreement signed before December 25, 2024, they consented to end production at Dresden, a plant with 340 workers manufacturing the electric ID.3 from 2025, and Osnabrueck, where 2,300 employees produce the T-Roc Cabrio from 2027.

Many Chinese automakers are scouting for sites to build factories in Europe, the world’s second-largest electric vehicle market, to bypass tariffs imposed by the European Commission last year in response to what it deemed unfair subsidies in China.

TT (Tuoitrethudo)