SAIC Volkswagen says adjusting plant base “necessary”

HONG KONG (Reuters) – SAIC Volkswagen (ETR:), responding to reports it would close its Nanjing plant, said on Saturday that adjusting its production base was “normal and necessary”, Chinese media outlet Yicai reported.

Reuters reported this week that Germany’s Volkswagen plans to stop production at one of its combustion engine car plants in China, in a sign of automakers’ struggles to manage overcapacity in the world’s biggest car market.

Some reports said the joint venture of VW and Chinese partner SAIC Motor would close the Nanjing plant, although a person with direct knowledge of the matter told Reuters the firm had not decided whether to sell or close the plant.

Asked on Saturday about plans to close the Nanjing plant, SAIC Volkswagen said that “based on corporate strategic planning and reaction to market trends, company’s adjustment on its production base is a normal and necessary business behaviour”, Yicai said.

Yicai quoted SAIC Volkswagen as saying production at the Nanjing plant remains normal but as it will roll out many new products in the future, including gasoline and new energy vehicles, it needs to adjust its production base accordingly.

The company did not immediately respond to Reuters request for comment on Saturday. On Wednesday, Volkswagen said it does not comment on speculation and SAIC could not be reached for comment.