German car manufacturer Volkswagen and its Chinese partner SAIC will close their joint plant in Nanjing, eastern China.
Production at the facility has now ceased, Volkswagen confirmed to Euronews, and the plant is expected to slowly close down over the second half of the year. First reports of the closure first surfaced late last year.
This does not, however, spell the end for the partnership, as in 2024, the joint venture period of SAIC VOLKSWAGEN was extended until 2040, according to VW’s website.
Why is VW closing its Nanjing plant?
The plant opened in 2008 and holds a production capacity of 360,000 vehicles per year. It has recently produced popular cars such as the VW Passat and the Skoda Superb. The production of the Passat will relocate to a plant 70km away in Yizheng, also in Jiangsu province.
Located not far from the centre of Nanjing, a huge city with a population of nine million, the densely populated setting limited the plant’s ability to be extended and upgraded, sources close to the company told Euronews. As the industry focuses on a move to EV production, a transformation here would be too costly and inefficient.
This approach seems to align with VW future plans, outlined on their website in February 2025: “The Volkswagen Group is driving forward the digitalisation of its model portfolio ‘in China, for China’. Starting in 2026, the ‘China Electronic Architecture’ (CEA) – a powerful zonal architecture, will be used in the locally produced fully electric vehicles of the Volkswagen brand.”
EV capabilities will be developed at the new site in Yizheng and the site in Nanjing will be returned to the city.
Volkswagen has been producing cars in China since 1985 and has become a leader in mobility in the country. According to their website, they produced 2.93 million vehicles in 2024 in China.
