Volkswagen-SAIC ventures to close manual transmission plant in China

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(This November 18th story has been corrected to say employees will receive support from the company, not necessarily new jobs in paragraph 5)

BERLIN: A manual transmission plant owned by Volkswagen’s joint venture with SAIC Motors will close in March, the automaker said Friday.

The news was communicated to staff this week in a letter published in local media and marked the latest step in the joint venture to phase out production of manual cars as Chinese customers prefer automatic vehicles.

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The decision was made several years ago, a Volkswagen spokesman said, adding that production of manual transmission cars by the joint venture had dropped from 500,000 a year to about 50,000.

“For years, customer demand and with it our production and the number of employees has been constantly declining…shareholders met with the board of directors and decided to suspend production,” said the letter to staff at the Shanghai plant.

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About 250 staff will be affected and will be offered various support measures, a spokesperson said, without giving details, adding that this did not necessarily mean a new position.

Volkswagen’s joint venture with FAW in the northeastern city of Changchun will continue to produce manual transmission systems, although production has also declined in recent years.

The German automaker is the largest foreign automaker in China, but it is struggling to compete with domestic electric vehicle manufacturers.

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The goal is to double sales this year from last year’s 70,000, still a far cry from competitors like BYD, which sold nearly 220,000 EVs in October alone.

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