SAIC Volkswagen, a joint venture between SAIC Group and Volkswagen Group, recently announced that it plans to close its Nanjing factory next year in response to market trends and to adjust its production base.
According to mainland media reports citing multiple informed sources, SAIC Volkswagen is planning to shut down its factory located in Nanjing, Jiangsu next year. In response to this, SAIC Volkswagen confirmed on September 21st, “Adjusting the production base is a normal and necessary business practice.” Furthermore, with many new products in the pipeline, including new fuel and new energy products, SAIC Volkswagen needs to plan accordingly based on the new product lineup. Following the closure of the factory, SAIC Volkswagen plans to relocate some workers from the Nanjing factory to another factory in Yizheng, Jiangsu.
SAIC Volkswagen stated that all production activities at the Nanjing factory are running normally, with sufficient production capacity for the entire Passat series and all operations proceeding as usual.
The factory in Nanjing, Jiangsu, mainly produces various models under the Passat and Skoda brands, with an annual production capacity of 360,000 vehicles. The factory currently focuses on producing the sedan model, Lavida.
At present, SAIC Volkswagen has two complete vehicle plants in Jiangsu, Nanjing, and Yizheng. The Nanjing factory is located in the Jiangning area, which has become increasingly closer to the city center as Nanjing’s urban development progresses. The limited space for electrification upgrades and the supporting intelligent electric systems have become constraints. With Nanjing and Yizheng being less than 80 kilometers apart, from resource integration and economic perspectives, SAIC Volkswagen needs to rethink the future planning of these two factories.
Public information shows that SAIC Volkswagen is a Sino-German joint venture established in October 1984 through the cooperation of SAIC Group and Volkswagen Group. The company is headquartered in Anting, Shanghai, and has production bases in various locations such as Nanjing, Yizheng, Urumqi, Ningbo, and Changsha.
As a leading joint venture brand, SAIC Volkswagen has seen nearly a 5% year-on-year decline in sales volume in the first 8 months of this year. Accelerating adjustments have become a pressing issue for the company.