Volkswagen Confirms Production Halt at Nanjing Plant in China

Volkswagen Group has confirmed that its joint venture plant in Nanjing, Jiangsu Province, China, has currently suspended production and will gradually close down in the second half of this year. The Nanjing plant, which began operations in 2008, has an annual production capacity of 360,000 units and has recently focused on manufacturing popular models such as the Volkswagen Passat and Skoda Superb. Production of the Passat series will be gradually shifted to a factory in Yizheng City, located 70 kilometers from the Nanjing plant. Volkswagen Group plans to develop electric vehicle production capacity at the new factory in Yizheng, while the Nanjing plant will be returned to the Nanjing municipal government. Sources indicate that the Nanjing plant, located near the densely populated city center with a population of 9 million, faces limitations in expansion and upgrades due to the surrounding population. As the industry transitions to electric vehicle production, retrofitting the plant would be costly and inefficient. Volkswagen Group's website outlined in February this year that they are accelerating the digitalization process of models under their 'In China, For China' strategy. Starting in 2026, the electronic and electrical architecture (CEA) developed in China will be applied to the pure electric models produced by Volkswagen in China. Since 1985, Volkswagen Group has been manufacturing vehicles in China and has become a leader in the mobility sector in the country. According to their official website, they produced 2.93 million vehicles in China in 2024. However, as a manufacturer that once held the top sales position in the Chinese automotive market, Volkswagen Group is facing challenges with declining market share. To enhance its competitiveness in China, Volkswagen Group is collaborating with partners like SAIC Group and XPeng Motors to actively launch new models in response to market changes. It is noteworthy that in 2023, the output of Volkswagen Group's 39 factories in China was still more than a quarter lower than the pre-pandemic peak; the operating profit of Volkswagen's joint ventures in China also dropped by 20% to 2.62 billion euros (approximately 2.92 billion USD), roughly half of the peak level in 2015. In fact, as early as September of last year, Reuters reported on Volkswagen Group's plans to cease production at its Nanjing plant.