Volkswagen has confirmed the start of discussions with its Chinese partners regarding potential investment in its German plants. VW Group CEO Oliver Blume told a conference in Berlin today that these were “conversations without any concrete decisions”, while signaling he welcomes foreign investment in Europe.
Dresden and Osnabrück plants in the balance
Volkswagen is currently exploring alternatives for its Dresden and Osnabrück plants as part of a cost-cutting and restructuring strategy.
The Dresden plant, which employs 340 workers and produces the ID.3 electric compact, is set to cease production in 2027.
With regard to Osnabrück, internal sources have revealed that VW may be considering a sale to a Chinese investor, an option deemed more profitable than closure.
Chinese partners and their interest in Europe
Volkswagen works closely with three partners in China - SAIC, FAW and JAC - in addition to its stake in start-up Xpeng. At present, none of those players has any production capacity in Europe.
Importantly, Chinese automakers gaining a stake in German plants could enable them to avoid European Union tariffs on imports of Chinese-made electric vehicles.
Stephan Soldanski, a union representative from Osnabrück, said that workers would agree to produce for Chinese partners, but only under the VW logo and standards.
A strategic and political decision
Volkswagen, the symbol of German industrial power, is facing a global decline in demand and challenges linked to the transition to alternative powertrains.
The potential sale of German plants to Chinese investors could bring in between €100 and €300 million per facility, according to a banker close to the matter.
At the same time, the initiative, although strategic for VW, could become a sensitive political issue. Chinese investment in Germany, covering sectors such as telecoms and robotics, could now include the automotive sector, increasing the pressure on European manufacturers already struggling to remain competitive in the face of the rise of Chinese electric vehicles.