VW share: VW expects rising prices for combustion engines due to more complex exhaust gas cleaning – VW is sticking to production in the controversial Xinjiang region

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The new head of the Volkswagen brand, Thomas Schäfer, expects vehicle prices to rise significantly as a result of the planned EU emissions standard Euro 7. Combustion vehicles would each be 3,000 to 5,000 euros more expensive due to the more complex emission control system, he told the “Welt am Sonntag”. “With a small car, these additional costs can hardly be absorbed.” Starting prices at 10,000 euros will no longer exist in the future. From 2025, the group wants to bring four electric small car models onto the market, said Schäfer. In addition to the ID.2, there will be another model from VW, a Skoda and give a cupra. VW wants to offer the ID.2 “for less than 25,000 euros”.

Volkswagen is sticking to production in the disputed region of Xinjiang

Volkswagen AG is sticking to its production of vehicles in China’s western region of Xinjiang. The German automaker plans to continue operating its Xinjiang factory and is open to a factory visit by a human rights expert recently appointed by the company’s board of directors, said Stephan Wöllenstein, the outgoing CEO of Volkswagen China. Western politicians, academics and human rights groups accuse Beijing of violently repressing ethnic minorities in the region.

Wollenstein said the decision to continue operating the plant came after a discussion with Volkswagen’s Chinese joint venture partner, the state-owned SAIC Group. “We both came to the conclusion that it is very difficult to close a plant and then reopen it afterwards,” Wollenstein said, referring to a conversation with Chen Hong, chairman of the Shanghai-based SAIC.

Executives at the Chinese automaker told Volkswagen that the company would do more harm than good if it closed the plant for political reasons, Wöllenstein said. Volkswagen is under pressure in Germany to consider closing the plant. In June, the German government refused to renew risk insurance for Volkswagen’s operations in China, citing Beijing’s treatment of the Uyghur minority. The influential German metalworkers’ union has also called on the company to reconsider its presence in Xinjiang.

Xinjiang has become a geopolitical hotspot for multinational companies in recent years. According to Western researchers, China’s government has been holding hundreds of thousands of people, mostly Muslim minorities, in a network of detention centers in Xinjiang as part of a campaign. US officials, some lawmakers from other Western countries and some human rights activists have said Beijing’s treatment of the Uyghurs amounts to a form of genocide. China has denied these allegations, saying its policies in the region are aimed at countering terrorism and protecting national security.

This week, Chinese President Xi Jinping visited Xinjiang for the first time in over eight years. Volkswagen’s new human rights officer, Kerstin Waltenberg, will take up her post in August at the company’s headquarters in Wolfsburg, a spokesman said. Waltenberg is to oversee the carmaker’s activities worldwide, including China, and build a team of specialists. From January, a new German law will mandate more due diligence against human rights abuses along supply chains.

The Volkswagen plant in Xinjiang’s provincial capital Urumqi was founded in 2013. Around 20,000 vehicles per year used to be produced there, but production has since declined, according to Wöllenstein. The plant now produces two models of vehicles and employs about half the workforce it used to have, with more than a quarter of the workforce being from ethnic minorities. The company has not prioritized the allocation of chips for the plant when the industry has been struggling because demand for the vehicles produced there has been low, the manager said.

All of the plant’s employees are directly employed, and the German automaker has not identified any forced labor at the plant, the manager said. Volkswagen carries out random checks at the suppliers and relies on their self-declarations.

A US law that went into effect in June requires all products made in Xinjiang or by companies linked to the government there to be of forced labor origin.

BERLIN (dpa-AFX) / HONG KONG (Dow Jones)

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