Volkswagen was a big brand in China for years, the deal with any company that wants to produce product in China is that they own half of the company there. This is true with Tesla, and others too. In recent times, sales have fallen off.

Why? Because China is great at copying others. China was a huge market for VW and lately they have had to contend with the 100+ brands that are reported subsidized by the Chinese government. In this case they are making electric, hybrid, and gas powered cars at a fraction of the price, with more automation and cheaper labor. What does this mean for all car brands in China? The writing is on the wall and could impact the auto industry in many countries.

Production levels are much lower than in the past and it’s costing them financially. Now VW is preparing to share its production facilities with its Chinese rivals in an attempt to offer a slump in car demand, its chief executive has said. This is a bad idea.

Volkswagen has seen soft sales in China and electric cars sales globally, they are far from the expected sales numbers. VW has threatened to close at least two factories in Germany until it struck an eleventh-hour deal with unions to keep its sites open.

VW had argued that its factories were built to supply a European car market where it was selling 16 million vehicles every year, but there was now only demand for around 14 million cars. This meant it did not need the production offered from two of its factories.

Unions agreed to the axing of bonus payments and the loss of more than 35,000 jobs by 2030 in return for a reduction in production across its sites rather than closing facilities entirely. These layoffs are a sign that they need to shift to hybrid, gas, and diesel vehicles which is what customers want.

German carmakers are weighing up deals to use excess space in their factories. This comes as they battle fierce competition from Chinese EV makers, which have been flooding Europe with cheaper vehicles.

The EU brought in tariffs on imports of Chinese electric vehicles last year amid claims that Beijing was handing companies unfair subsidies which let the country’s manufacturers undercutting Europe’s industry. They offer similar vehicles at a fraction of the price and have been destroying the German car market.

The downturn in Germany’s automotive industry has sparked concerns over its wider economy, given it has historically been reliant on the auto industry to support jobs and its economy. Another impact is the lower sales for EVs across Europe. It has been weak in general, even though there has been a push to go all electric. China saw this and has adjusted and is now offering other engine choices too. China is targeting all brands.

Countries of the world have sent many the good paying jobs and products to China with their unfair trade agreements, the politicians and corporations are responsible for it. They have made China so powerful with our money, making them the producers and extremely wealthy. This is the result, letting China run German factories is letting the fox into the hen house. It is a big, big mistake.

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