Volkswagen Sells Operations in Uyghur Region Amid Long-Standing Human Rights Pressure

Volkswagen Divests Xinjiang Plant in Long-Awaited Exit from Uyghur Region Amid Rights Concerns

By Uyghur Times Staff

November 27, 2024, 2:24 PM EST

On November 27, 2024, Volkswagen Group announced the sale of its stakes in manufacturing and testing facilities in Uyghur homeland, Xinjiang Uyghur Autonomous Region (also known as East Turkistan), ending its 12-year presence in the area. The decision, made through its joint venture SAIC Volkswagen (SVW), transfers ownership of the assembly plant in Urumqi (the regional capital), along with test tracks in Turpan (Xinjiang) and Anting (Shanghai), to Shanghai Motor Vehicle Inspection Certification (SMVIC), a subsidiary of the state-owned Shanghai Lingang Development Group. SMVIC will assume responsibility for all employees at the sites.

Volkswagen emphasized that the move was driven purely by economic reasons as part of a strategic realignment, with no production having occurred at the Urumqi plant since around 2019 due to low demand for the gasoline-powered vehicles it was designed to produce. The company explicitly stated that the decision was not influenced by political or human rights considerations. In the same announcement, Volkswagen and its long-time Chinese partner SAIC Motor extended their joint venture agreement until 2040, committing to launch 18 new models by 2030 and introducing a new generation of electrified vehicles starting in 2026. This extension underscores Volkswagen’s continued deep investment in China, the world’s largest auto market, where the company sells about one in three of its vehicles globally.

The Urumqi plant, established a decade earlier as part of the SAIC-Volkswagen joint venture, had drawn sustained international scrutiny. Rights groups, including Human Rights Watch and others, accused Western companies operating in Xinjiang of indirect exposure to state-imposed forced labor programs targeting Uyghurs and other Turkic Muslims. Reports documented mass detentions, forced assimilation, surveillance, and labor transfer schemes in the region since around 2017. Volkswagen had previously denied any risk of forced labor at its facilities, commissioned audits (criticized by some as inadequate due to the repressive environment preventing credible verification), and engaged in discussions about the site’s future as early as February 2024.

The sale was welcomed by investors and stakeholders who had pressured the company for years. Janne Werning of Union Investment, an investor advocate, described it as a “long-overdue step showing that human rights are non-negotiable.” The state of Lower Saxony, Volkswagen’s second-largest shareholder, also supported the exit. Rights organizations viewed the move as significant but overdue, noting it reduces direct operational complicity while broader supply chain risks in China may persist.

This development highlights the broader challenges multinational corporations face in balancing commercial interests in major markets like China with ethical accountability amid geopolitical tensions, trade disputes, and allegations of serious human rights abuses. Beijing has consistently denied accusations of abuses in Xinjiang, describing its policies as vocational training and anti-terrorism measures.