Monday, February 17, 2025

Chinese companies to acquire Volkswagen factories in Germany

Chinese companies are eyeing the acquisition of Volkswagen factories in Germany. In what could mark China’s entry into the production of motor vehicles in Europe, the Chinese companies have expressed their interest following a scaling down of production that is being conducted by Volkswagen.

According to a report that appeared on Reuters, manufacturing cars in Germany for sale in Europe would allow China’s EV makers to avoid paying EU tariffs on electric cars that are imported from China.

“Buying a factory would allow China to build influence in Germany’s prized auto industry, home to some of the oldest and most prestigious car brands,” Reuters reported.

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“Chinese companies have invested across a range of industries in Europe’s biggest economy, from telecommunications to robotics, but have yet to set up traditional car manufacturing there despite Mercedes-Benz having two large Chinese shareholders.”

Late last year, Volkswagen announced plans to close at least three factories in Germany, lay off tens of thousands of employees, and scale down operations at other facilities in Europe’s largest economy.

Although Volkswagen is the biggest auto maker in Europe, Reuters reports that it has suffered a fall in sales in the face of rising competition from Chinese companies.

The car maker is behind brands such as Porsche, Audi and Skoda. In nine months of 2024, Volkswagen delivered 6.52 million vehicles worldwide. This was however, down 2.8 per cent on the previous year (6.72 million vehicles)

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