China reportedly eyes unwanted Volkswagen factories to gain foothold in German market

It is reported that Chinese officials are trying to pave the way for local automakers to purchase German factories that are slated for closure. In particular, they are rather interested in Volkswagen’s sites and another source said that the German automaker would be open to selling its Osnabrück factory to a Chinese buyer.

The move here looks to be an attempt by China to build influence in Germany’s auto industry. The latter is often seen as a prized and prestigious landscape in the world of automakers. But make no mistake, there will be political challenges to this.

Volkswagen is a key symbol in the German industrial sector. So, allowing China to wrap its tentacles around their previous assets or in any form of a collaboration will be a rather sensitive issue. That especially since Germany’s manufacturing sector has taken a massive hit in recent years.

As such, allowing China to come in will pave the way especially for Chinese EV makers to avoid EU tariffs and pose a further threat to domestic manufacturers in Europe.

With Germany facing political troubles, any new government voted in will certainly have a tricky decision to navigate already here.

This article was written by Justin Low at www.forexlive.com.