Volkswagen Group China plans to shut down a manual transmission plant in Shanghai next March, the German automaker’s Chinese branch told Yicai Global. The adjustment is because of market demand changes, the source said.
The manufacturer is shutting down and liquidating Volkswagen Transmissions Shanghai, Volkswagen China said, adding that it is moving ahead with an orderly staff resettlement plan.
Production of manual transmission cars by the Volkswagen-SAIC joint venture (JV) fell from 500,000 a year to just 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,” reads a Volkswagen letter to the Shanghai factory’s staff.
About 250 employees are impacted, and they will be offered new jobs within the company.
“The automotive industry is undergoing a subversive change,” said VW’s China unit in an open letter to employees circulating online.
“Our market is rapidly transforming from traditional fuel vehicles to new energy vehicles.
“As we know, the company’s only product is manual transmissions. Our product lines, production scale and staff have been gradually shrinking in recent years, given the weakening demand.”
Volkwagen China Investment, FAW, & SAIC Motor hold a stake
Volkswagen Transmissions Shanghai was established in October 2001, with Volkswagen China Investment holding a 60% stake and FAW and SAIC Motor each owning 20%, according to corporate data platform Tianyancha.
Manual gearboxes on VW models
On the other hand, Mercedes-Benz announced that it will phase out all stick shifts by 2023.