The decision aligns with VW’s broader cost-cutting measures, which include closing factories and reducing its workforce in Germany…reports Asian Lite News
German automaker Volkswagen (VW) announced on Wednesday its decision to sell operations in China’s Xinjiang region, a move that comes amid ongoing allegations of human rights abuses in the area. The region has been under international scrutiny for claims of forced labor and reeducation camps targeting Uyghurs and other minority groups.
Volkswagen plans to divest its factory in Urumqi, Xinjiang’s capital, along with a test track in Turpan. The company attributed the decision to “economic reasons,” as VW’s growth slowed in 2023, losing ground to domestic competitors in China.
In the process, VW is extending its partnership with Chinese firm SAIC by a decade, until 2040. The two companies will sell the Xinjiang facility to SMVIC, a subsidiary of the Shanghai Lingang Development Group, which has also agreed to retain the factory’s workers.
The decision aligns with VW’s broader cost-cutting measures, which include closing factories and reducing its workforce in Germany. European automakers like VW are also facing potential challenges due to escalating trade tensions between the European Union and China, following the EU’s imposition of high tariffs on Chinese electric vehicles.
Xinjiang has drawn widespread condemnation for alleged human rights violations against Uyghurs, a predominantly Muslim ethnic group, as well as other minorities such as Kazakhs and Kyrgyz. Reports from human rights organizations suggest that over a million people have been detained in “reeducation camps” and subjected to forced labor.
Last year, activist groups filed a legal complaint in France, accusing Western companies of complicity in crimes against humanity for using subcontractors in Xinjiang. Volkswagen’s exit from the region could reflect growing pressure on corporations to address human rights concerns in their global operations.
In May, the World Uyghur Congress (WUC) and the Society for Threatened People (STP) have called for a complete investigation into “Uyghur forced labour in the supply chains” of Volkswagen (VW).
“Volkswagen must finally accept its responsibility for upholding the human rights of the Uyghurs and other Turkic peoples in northwest China. Volkswagen group can no longer remain silent about the human rights violations and genocide of the Uyghurs that are taking place right outside the Volkswagen factory gates otherwise, the company will become an accomplice of a criminal and anti-minority system,” World Uyghur Congress said in a statement, calling for the complete investigation in VW Annual General Meeting.
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