SAIC and FAW are producing fewer and fewer Volkswagens in China
- Since 2020, Chinese carmakers SAIC and FAW, which produce Volkswagens in China, have had to stop operations in several factories dedicated to the production of these cars, due to the constant decline in Volkswagen sales on the Chinese market, which have fallen from 4 million vehicles in 2019 to 2.6 million units in 2025.
- This loss of 1.4 million vehicles resulted in the shutdown of production at three plants, with a fourth (Nanjing) scheduled to close by the end of 2025. These four plants have a combined capacity of one million vehicles. Other plants have seen their production reduced or are being converted to the production of electric vehicles.
- The Volkswagen Group, which was the leader in the Chinese market for several decades, has therefore de facto confirmed that it will never again reach the sales volumes of the years 2015-2019 by reducing its capacity to 3 million vehicles per year in China.
- This is especially true since this initiative is accompanied by a strategic transition of the German carmaker towards battery electric, even if Volkswagen will have to make very significant efforts to be able to compete against Chinese carmakers already well established in the electric market such as BYD, Geely, Leapmotor, Nio, Xiaomi or XPeng.
- Despite the repurposing of some sites, Volkswagen maintains a significant industrial footprint in China, its second-largest market worldwide after Europe. The group is accelerating the conversion of several plants to electric vehicle production, including models in the ID range and future vehicles developed in partnership with the Chinese company Xpeng.