Volkswagen to sell Chinese factory over China’s treatment of Muslim minorities

German automaker Volkswagen (VW) has announced plans to sell its factories in Xinjiang, operated in collaboration with its Chinese partner SAIC, to state-owned Shanghai Motor Vehicle Inspection Certification (SMVIC). The move comes amid ongoing criticism from human rights groups over China’s treatment of Muslim minorities in the region.

Volkswagen confirmed that all employees at the Xinjiang facilities will be transferred to SMVIC as part of the sale.

The company, while distancing itself from the controversies surrounding the region, has extended its partnership with SAIC Motor Corp. until 2040.

In an official statement, VW said that SMVIC would take over its production plants and test tracks in Turpan, Xinjiang, and Anting, Shanghai. The company did not disclose financial details of the sale, which signals Volkswagen’s exit from Xinjiang.

Global concerns over Muslim population

The Xinjiang Uyghur Autonomous Region has been at the center of global concern due to alleged human rights abuses against its Muslim population.

VW’s decision to withdraw from the region follows increasing pressure from activists, raising questions about the future of foreign investment in Xinjiang.

Volkswagen’s Xinjiang plant, which opened in 2013 and produced the popular Santana model for the Chinese market, has scaled down operations in recent years amid rising tensions in the area.

Despite the withdrawal from Xinjiang, VW extended its joint venture with SAIC by another 10 years, through 2040. The company also plans to launch 18 new models by 2030 as part of its continued presence in China.