Volkswagen considers handing over idle factories to Chinese automakers

Volkswagen factory in Emden, Germany
Lars Penning/dpa/picture alliance via DW
Faced with one of the biggest crises in its history, Volkswagen is considering releasing part of the idle production lines in factories based in Germany to Chinese electric vehicle manufacturers. One of the focuses of this change could be a plant in Zwickau, in the state of Saxony, in eastern Germany.
Last week, Saxon Secretary of Economy, Dirk Panter, stated that "China is an opportunity" and that, "if we see this chance, we should take advantage of it".
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"Our criteria is not ideology, but future industrial viability and the security of Volkswagen's jobs in Saxony", said the secretary.
The plant in Zwickau was the result of an investment of 1.5 billion euros, in 2019, so that it could be used exclusively for the production of electric vehicles. However, the factory never reached full capacity and the idea now is that some production lines could be used by Chinese manufacturers, as a way of preserving jobs.
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Recently, the governor of the German state of Lower Saxony, Olaf Lies, was also open to the possibility of Chinese people producing models in idle Volkswagen plants. Lies' position carries greater weight as the state of Lower Saxony holds 20% of the shares in the Volkswagen group.
"These are statements that, just a few years ago, would have been considered heresy in Wolfsburg [Volkswagen's world headquarters]," noted an analysis published this week by the German weekly Die Zeit.
"For decades, Germany exported its automotive technology to China; today, German industry is discussing bringing Chinese technology and brands into its own factories. The reason: German and European factories no longer operate with sufficient capacity in many places, putting tens of thousands of jobs at risk," continued the newspaper.
Volkswagen has been facing problems with the transition to electric cars, which is occurring more slowly than planned. On the other hand, Chinese automakers are entering the European market with force, whose production has been suffering due to the United States' tariff policy and high energy and labor costs on the continent.
In addition, Volkswagen, which recorded a 44% drop in net profit in 2025, announced a restructuring plan with the cutting of 50,000 jobs in Germany by 2030 with the aim of reducing costs.
Conversations with China have been taking place since 2024, says newspaper
A report from the German newspaper Handelsblatt, published this Monday (18/05), states that conversations with Chinese automakers that could use Volkswagen structures have been taking place since 2024.
Quoting four anonymous internal sources, the newspaper states that collaborations were discussed with SAIC, a Chinese state-owned company and Volkswagen's partner in the Asian country, which could use a factory in Emden, in the northwest of the country. At the time, however, the negotiations were unsuccessful, adds Handelsblatt.
The continuity of operations at the Emden plant was, along with the Zwickau plant, placed in doubt in 2024 by Volkswagen CEO Oliver Blume, who also cited two more factories at risk: the one in Hannover and Neckarsulm, owned by the Audi brand.
In this context, the group is analyzing several scenarios. One possibility would be to bring more technology and models from Volkswagen's operations in China to Europe.

Another would be to make idle capacity available to the automaker's Chinese partners, such as Xpeng, with which VW has already developed joint models and in which the German group holds a 5% stake.
Also according to the newspaper Handelsblatt, Volkswagen's management rejects for now the idea that automakers that are not linked to the group, such as BYD, acquire entire factories from the German automaker.
Fear of industrial espionage
Last Wednesday (13/05), the Saxony's Economy Secretary defended Chinese investment in the local automotive industry during a session in the state Assembly. Members of other parties, however, warned of the possible risks of foreign presence in local industry.
"China is one of the most aggressive states in the world when it comes to espionage. I will say this clearly. These are not secrets," said state deputy Wolfram Günther. The parliamentarian added that negotiations between Saxony and Taiwan in the semiconductor sector could be an additional complication. "This could also generate major challenges, if mainland China has any involvement here, as we know what is at stake and what the lines of conflict are," he added.
The leader of the Left party bench, Susanne Schaper, cited the recycling and waste management company SRW metalfloat, which is based in Saxony and is controlled by Chinese shareholders.
"Workers and the union reported harsh confrontations with the Chinese owner. And they spoke about the refusal to dialogue and an understanding of work that is incompatible with ours. We cannot forget experiences like these when we talk about participation or joint ventures," said Schaper.
"The idea is provocative: German factories, qualified German workers, German engineering tradition - but Chinese brands and Chinese technology. The debate touches on a nerve, as it is more than just a question of industrial policy;

Source: G1

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