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Are Chinese car manufacturers buying German VW plants?

Europe’s automotive industry has overcapacities – VW also wants or needs to offload plants in Germany. The focus is on the locations Dresden and Osnabrück. Chinese manufacturers are reportedly interested in them.

The focus is especially on the former Karmann plant in Osnabrück. | Photo: Volkswagen
The focus is especially on the former Karmann plant in Osnabrück. | Photo: Volkswagen
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Longbridge, Bochum, Saarlouis, Brussels... the list of car factories up for disposal is getting longer. Usually, in the end, only closure and demolition remain... now the VW group is desperately looking for buyers for the former Karmann plant in Osnabrück, which has mostly convertible expertise — which is increasingly less needed — and a partner for Ferdinand Piech's Glass Factory in Dresden, which currently assembles a ridiculous 6,000 VW ID.3s, but was once built for the luxury liner Phaeton.

The news agency Reuters now reports, citing a "person familiar with the mindset of the Chinese government," that China is considering buying this time after all. A brief flashback: Previously, this mostly failed due to costs: MG maintained a minimal final assembly at the British Rover plant Longbridge for a while, but it turned out to be much more expensive than importing the cars directly from China. Opel abandoned the Bochum plant due to a lack of interest, Ford is still struggling with Saarlouis, and Audi has meanwhile given up on Brussels as well — too cramped, too expensive, too old...

Chinese manufacturers also prefer to build completely new on green fields — and cheaper in Eastern Europe

Chinese car manufacturers also prefer to build completely new on the "Green Field" — preferably in Eastern Europe — rather than taking over old, intricate company complexes at high-wage locations. Small exceptions include the takeover of the former Ebro, or rather Nissan, plant near Barcelona by Chery and the consideration by Leap Motors to also assemble cars in Eisenach.

Chinese authorities and car manufacturers are reportedly interested in the VW plants, as this could expand their influence in Germany as saviors or even creators of jobs. And this could also avoid special tariffs! What is more alarming, however, is that China is considering becoming part of "Germany's renowned automotive industry."

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China has swallowed up many German companies

Chinese companies have now taken over or hold the majority in many German firms (Kuka, Putzmeister, Leoni), but a classic automotive production by a Chinese company in the "birthplace of the automobile" has not yet been established. The fact is: Production in the Transparent Factory is set to end in late 2025 and VW wants to repurpose it. Therefore, IG Metall reported:

"An alternative overall concept is now being developed for the period starting in 2026. It is already certain: Volkswagen AG will continue to be present at the site with its own activities in the future."

This means that Dresden is likely to remain somehow in VW's hands as a "showcase," especially since the properties could also be turned into a museum, a concert hall, or something else.

Dresden could be repurposed, but Osnabrück remains challenging

In Osnabrück, the production of the VW T-Roc Cabrio has currently been extended until late summer 2027, but after that, the plant is obsolete: VW is planning no more convertibles. According to several reports, VW is also ready "to sell the plant in Osnabrück to a Chinese buyer." Officially, a VW spokesman stated according to the platform "electrive.net":

"We are committed to finding a continued use for the site. The goal must be a viable solution that takes into account the interests of the company and its employees."

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Beijing Awaits the New German Government

He did not comment on speculations about a concrete offer. Here, too, the problem is: Osnabrück is not a modern plant for large-scale car production, as Karmann, being a small coachbuilder, always operated in the convertible niche. And that niche is getting even smaller and practically doesn't exist in China.

According to Reuters, investment decisions are also expected to “depend on the stance of the new German government towards China after the elections in February.” Additionally, Beijing anticipates resistance and refers to this as China’s “most politically sensitive investment” so far, as Reuters puts it. Especially since the Trump administration will also increase its pressure on Germany, which could further complicate such a deal.

What does this mean?

Regardless of whether a Chinese manufacturer takes over the German car plants or not: What is happening here is nothing less than a turning point! Because VW is relocating its production further abroad due to cost pressure and can no longer maintain or use the capacities here. And it is currently acting from a position of weakness. It's not as bad as it once was with Rover, where the entire rest of the brand fell with Longbridge, but it's still clear: China could buy if it wanted to, VW must sell or shut down because it has no choice left. That is the point that should cause concern here. Because China doesn't have to buy, it can also wait... That VW partner SAIC has long-lasting patience was proven with MG. The brand was carefully but sustainably brought back with a lot of patience.

Translated automatically from German.
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