Chinese competition, Xinjiang plant loom large for Volkswagen investors at AGM

BERLIN (Reuters) – Volkswagen (ETR:) investors will demand answers from the carmakers’ executives at its annual general meeting on Wednesday on its competitiveness in China and its contested plant in Xinjiang, advance copies of their speeches showed.

Chief Executive Oliver Blume will acknowledge the fast pace of China’s electrification, and outline Volkswagen’s strategy to hold on to its position as market leader – tailoring products to Chinese tastes and building local partnerships, according to a copy of his speech, which does not mention Xinjiang.

Shareholders Deka Investment and Union Investment will call on the carmaker to require of its joint venture partner SAIC that it conducts an external independent audit of the plant in Xinjiang, where rights groups have documented human rights abuses including mass internment camps which China denies.

“Volkswagen must be certain that its supply chains are clean,” said Ingo Speich, head of sustainability and corporate governance at Deka.

Haiyuer Kuerban, a Uyghur activist and representative of non-government organisation World Uyghur Congress, is due to speak in the name of the Dachverband Kritische Aktionaere (Umbrella Organisation for Critical Shareholders).

Volkswagen’s China chief visited the plant in Xinjiang, jointly owned with SAIC earlier this year and said he saw no evidence of forced labour.

Yet rights groups have said heavy pressure from the state makes it difficult to trust that staff could speak openly, and pointed to reports in Chinese media that the carmaker’s suppliers across China source from the Xinjiang region.

Shareholders will also flag the rising competition from Chinese electric vehicle competitors in China, with BYD outselling the Volkswagen brand to be the bestselling passenger car brand earlier this year.

Chinese EV makers, as well as Tesla (NASDAQ:), threaten not only to weigh on Volkswagen’s market share in China but also in Europe, the shareholders will warn, asking for clarity on how Volkswagen will defend its place.