Volkswagen’s struggling German plants could end up sharing space with Chinese brands

German automotive giant Volkswagen, which until recently was considering closing two of its German plants, could look to Chinese manufacturers to keep its production facilities viable.

A recent report by the Financial Times indicates that company executives are open to the idea of allowing Chinese manufacturers to use up excess capacity in their factories.

Audi’s chief executive labelled such a move as “thinkable”, according to the report, while Volkswagen’s chief financial officer told the publication: “We’re open for any discussion on any topic with any partner. In a dynamic world, you have to keep all options open.”

Such a move would make a great deal of sense as the German carmaker grapples with decreasing demand for vehicles in Germany. In October last year, unions reported that Volkswagen was planning to close three of its German vehicle plants, while laying off tens of thousands of staff and scaling down production at the remaining facilities.

However, in late December, the company reportedly struck a deal with its biggest union, averting plant closures but cutting up to 35,000 jobs in a “socially responsible manner” by 2030, while also removing bonus payments and gradually scaling back production.

The latter would naturally create the necessary space for other vehicle manufacturers to use up some capacity at Volkswagen’s plants.

While reports last week indicated that Chinese manufacturers were interested in taking over Volkswagen facilities completely, a more recent report by Manager Magazin stated that the company could instead be looking at entering a joint venture with one of the Chinese carmakers in Germany. This could see the companies sharing expertise while allowing the Chinese entrant to avoid the special tariffs imposed on Chinese built vehicles by the European Union.

These tariffs could in the long term also benefit South Africa’s vehicle manufacturing industry.

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