VOLKSWAGEN CONSIDERS PARTNERING WITH CHINESE CARMAKERS – The company grapples with declining demand and growing competition entering the market in Europe
Volkswagen is exploring partnerships with Chinese carmakers to take over its unused European production lines as it grapples with declining demand and growing competition from the same companies entering the market. Executives from VW and Audi told the Financial Times that working with Chinese electric vehicle (EV) makers expanding into Europe could help address falling sales. Audi has already partnered with SAIC, the maker of MG, to produce EVs for the Chinese market, a model that could extend to Europe.
David Powels, VW’s Chief Financial Officer, indicated that the company is open to discussions about idle production lines at its German plants, stating, “We’re open to any discussion with any partner. In a dynamic world, you have to keep all options open.”
Chinese brands like BYD, supported by government subsidies and lower production costs, are rapidly advancing in the EV market, posing a significant challenge to legacy European carmakers. VW has also struggled in China, where its market share has halved in five years due to weak performance in the battery-powered vehicle sector.
Last month, VW agreed to scale back production across Germany, cutting annual capacity by roughly 730,000 cars by 2030. With Europe’s shrinking automotive market and mounting competition, partnerships with Chinese EV makers may offer VW a way to adapt to the evolving landscape.
