VW sells plant in Chinese region of Xinjiang

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Volkswagen has sold its controversial plant in the Chinese region of Xinjiang, citing “economic reasons” for the decision.

The German carmaker said on Wednesday that Shanghai Motor Vehicle Inspection Certification (SMVIC), a subsidiary of Shanghai Lingang Development Group, had agreed to purchase the factory.

The facility was built in 2013 by VW in partnership with its joint venture partner SAIC, which is also owned by the Shanghai government.

SAIC, VW’s largest JV partner in China, has long resisted requests by VW to sell the plant in Xinjiang — which has not produced cars since the pandemic — after reports of forced labour and detention of the mainly Muslim Uyghur ethnic group in the region, which Beijing has vehemently denied.

The FT reported this year that an audit into the factory, which the company had claimed cleared it of allegations of forced labour, had failed to meet international standards.