Volkswagen Halts Production In China Due To New Covid Wave

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Auto giant Volkswagen (VKW.L,VLKAF.PK,VOW.BE) has been forced to halt production at its Chengdu, China, plant due to a wave of COVID cases.

The city of Chengdu, among many others, has been hit by a new wave of COVID cases. China has continued its aggressive "zero-COVID" policy, striving hard to eradicate the virus completely from the country. However, restrictions have made it nearly impossible for automakers to secure some components.

Volkswagen said component shortage was the main reason behind a decision to halt production at a joint venture plant that it has with China FAW Group Co. in Chengdu and two of five production lines at its factory in Changchun.

The German company is not sure when they can resume production and has no plans to create closed loops.

According to Volkswagen Group's Chinese site, the Chengdu plant has a production capacity of 600,000 units annually. Currently, the facility produces the VW ID.4, the VW Golf, the VW T-Roc, and the Audi Q2. Volkswagen has not specified which vehicles have been affected by the parts shortage.

The situation got worse after protests erupted in many major cities in China over the weekend, including in Chengdu. The protests were against the Chinese government's heavy-handed COVID policy.

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