Volkswagen And SAIC: 40 Years Strong, Eyes On 2040

Volkswagen’s story in China started four decades ago when it became the first major automaker to team up with a local partner, SAIC. Now, as they celebrate 40 years together, the duo is locking in their partnership until 2040.

While VW and SAIC marked 40 years of partnership with a new deal, VW quietly parted ways with its Urumqi plant in Xinjiang. The facility, long under scrutiny for its location in a region linked to alleged human rights abuses against the Uyghur people, cast a shadow over the automaker. Despite internal audits finding no evidence of forced labor, the controversy never faded.

The plant, once capable of rolling out 50,000 cars a year, hasn’t produced a single vehicle since 2019 and now only handles final inspections with a skeleton crew of 200. The sale to Shanghai Motor Vehicle Inspection Certification marks the end of an uneasy chapter for VW.

Why extend the deal now, a decade early? Simple: big plans need time. VW and SAIC are gearing up to unleash 18 new models, with 15 tailored for Chinese roads. Six of those will be EVs, including two built on a brand-new platform debuting in 2026. However, plans also include plug-in hybrids and range-extending EVs for that year.

“China is a driver of innovation for autonomous driving and electric mobility,” said Ralf Brandstätter, VW’s man in charge in China. He added that this renewed partnership helps them tap into that energy and give them a global edge.

However, the challenge is that Chinese car buyers are no longer lining up for European badges the way they used to. Homegrown brands have stepped up, offering sleek designs and competitive prices that are difficult to beat. 

VW knows the stakes are high, but with this renewed commitment and a slate of fresh models, it’s ready to fight for its place in a rapidly evolving market. The question is: Can they win over Chinese buyers again?