Chinese firms eye VW plants in Germany amid EU tariff woes

Purchasing a factory in Germany would open entirely new opportunities for China, granting access to the largest automotive industry in Europe. Equally important is the potential to bypass the high EU tariffs currently imposed on electric cars from China.

For years, Chinese companies have invested in various German industries, from telecommunications to robotics, but they have not yet started traditional car production there. It is conceivable that this could change in the coming years.

According to sources cited by "Reuters," the Chinese are interested in buying at least one of the two Volkswagen factories scheduled for closure. This refers to the plants in Dresden and Osnabrück.

The German company is being forced to halt production at these factories as part of a cost-cutting program. Selling the plants could prove more profitable than closing them down.

"We are determined to find new uses for these locations. The goal must be a feasible solution that considers the interests of the company and employees," said a Volkswagen spokesperson in a conversation with "Reuters," refusing to comment on a potential acquisition by Chinese companies.

Chinese companies are concerned about how they will be received by German labor unions, which occupy half of the seats on advisory boards of German companies and demand extensive guarantees for location and jobs, according to someone familiar with Chinese perspectives.

Stephan Soldanski, a representative of the Osnabrück labor union, said that the factory workers would not object to producing for one of Volkswagen's Chinese joint venture partners, but with one condition.

"I can imagine that we could produce something for a Chinese joint venture... but under the VW logo and according to VW standards. That is the key condition," he said.

However, frosty relations between the two countries' governments could hinder an agreement. The current Foreign Minister Annalena Baerbock described President Xi Jinping as a "dictator" and China as a rival. Much depends on the outcome of the February parliamentary elections and whether the current government remains in power.

Germany is not the only country where the Chinese are trying to extend their influence. So far, Chinese companies have chosen countries with lower labor costs and weaker labor unions, such as Hungary, Turkey, or Poland. If they manage to enter Germany, it will be an unprecedented event that could have significant consequences for the European automotive industry.