China could buy Volkswagen factories

China could buy Volkswagen factories

Chinese entrepreneurs could get their hands on German car companies slated for closure. This is the indiscretion relaunched by Reuters, according to which Chinese officials and car manufacturers are particularly interested in the sites of Volkswagen, the European automotive giant which is facing a period of difficulty due to declining sales and growing competition with Chinese manufacturers. According to sources close to the Chinese government, there is high interest in the Osnabruck plant, which will cease operations in 2027, sending 2,300 employees home.

“The brand and standards must be those of Volkswagen”

Sources close to the company report that Volkswagen would be willing to sell the Osnabruck plant to a Chinese buyer, provided that the interests of the company and the workers are guaranteed. This option would be more advantageous than the permanent closure of the plants, with an estimated value of between 100 and 300 million euros for each factory.

The Chinese car manufacturers must in fact overcome the obstacle of the powerful German trade unions (who preside on the boards of directors), who have agreed to stop production in Dresden, a plant with 340 workers that produces the electric ID.3 model in 2025, and in Osnabruck , the T-Roc Cabrio is produced. Stephan Soldanski, a union representative in Osnabruck, said workers would have no problem producing for a Chinese joint venture, as long as the branding and standards remained those of Volkswagen.

A loophole from European tariffs on Chinese electric cars

Many Chinese automakers are seeking locations for their factories in Europe, the world’s second-largest electric vehicle market, to get around tariffs imposed by the European Commission last year to counter what it called unfair state subsidies given to the electric car industry .

Producing cars directly in the old continent would therefore allow Chinese companies to circumvent tariffs and compete more effectively with European producers. And the German giant’s factories are tempting for car manufacturers who want to get around the ax of tariffs imposed by Brussels.

In this sense, many Chinese automotive companies have opted to build new factories in low-cost countries with weaker unions, such as BYD in Hungary and Türkiye. Leapmotor is planning production with Stellantis in Poland, and Chery Auto will begin producing electric cars this year at a plant previously owned by Nissan in Spain.

However, the probable Chinese investment in Germany would raise not only economic but also political questions. Berlin, which in recent years has taken a tougher attitude towards Beijing, must find the right balance between the need to attract foreign investments to safeguard jobs and that of maintaining a certain strategic autonomy towards a commercial partner which is also a direct competitor.