Volkswagen Struggles With Sales In China

Volkswagen expects sales in China to stagnate and lowered its revenue target 14% for the country, its China chief said Tuesday.

In an interview published in the German language newspaper Handelsblatt, China head Ralf Brandstaetter said the automaker expects to sell 3.3 million cars in China this year. That's on par with last year's results, but short of the 3.85 million vehicles Volkswagen had previously estimated it would sell.

The German company is still feeling the impact of COVID and supply-chain problems, including a microchips shortage, Brandstaetter said. Volkswagen's factories in China haven't been impacted by any of the new coronavirus restrictions, but some dealerships have had to close.

Brandstaetter said Volkswagen is still on target to double its electric car sales in China this year.

Volkswagen's electric vehicle sales still lag behind Tesla and others in China, which offers tax breaks to EV owners, but the company said its expected growth is "promising."

Brandstaetter also addressed a controversy at Volkswagen's Xinjiang factory. Reports of human rights violations have spread in the region, including concerns of slave labor in factories and Uyghur detention camps.

Brandstaetter said he plans to visit Volkswagen's factory in Xinjiang to investigate and ensure no human rights violations.

"I would like to get a first-hand look on site as soon as possible. That was not possible until now because of coronavirus restrictions," said Brandstaetter.