Volkswagen Set to Shut Down China Manual Transmission Plant

German automaker Volkswagen announced that a manual transmission plant in China owned by its joint venture with SAIC Motors will be closed next March. The company communicated the decision with the factory staff via a letter this week. Volkswagen has been winding down production of manual transmission cars in China because domestic customers prefer automatic transmission.

Volkswagen’s decision was taken several years ago, and the annual production of manual transmission cars by the joint venture had already fallen from 500,000 to about 50,000.

“For years, customer demand and, with it, our production and employee numbers have consistently fallen … shareholders came together with the management board and decided to suspend production,” the letter to the factory staff said.

Around 250 workers are expected to be affected by the decision, and the company said it would offer support measures.

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

Although the German automaker is the largest foreign automotive company in China, it has been battling, like other foreign automakers, to compete with Chinese electric vehicle manufacturers.

It aims to double sales this year from last year’s 70,000, still a long way short of competitors such as BYD, which sold nearly 220,000 EVs in October alone.

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