Volkswagen opens plant in Chinese province of Xinjiang World Socialist Web Site — Volkswagen 2013

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Volkswagen 2013

Published by the International Committee of the International (ICFI)

Volkswagen plant in Chinese province of

By Philipp Frisch

16 September

In early September, the German automaker opened a new plant in capital of Xinjiang province in China. It is the first auto ever to be established in the region, is dominated by steppes and a desert

Thousands of VW’s mid-range Santana”—will be produced at the plant and on the Chinese market in the near Since the plant is still completion of its stamping and painting some parts will need to be delivered from 4,000 km away—before the factory is functional.

Volkswagen is currently a total of seven new car plants in to be operational by 2015. Four of will assemble finished China is the most important for many western carmakers, prospects in Europe and America sharply declined in the wake of the crisis and austerity measures in the Union.

Earlier this week, announced that 6.7 percent autos have been in the European market since the of the year, compared to same last year. In South sales fell by 14.6 and in the US by 1.3 percent, while they by 18.4 percent in China.

VW financial officer Hans Pötsch explained the company’s in statements to the B ö rsen-Zeitung stock daily. Because auto in Western Europe have to a level not seen since Pötsch says, “belts have to be tightened when it to [production] costs”. This can mean that employees of the European car manufacturer now face layoffs and a sharp deterioration in conditions.

European and American carmakers are to compensate for their losses in and other markets by focusing on China. Fiat and Chrysler are close to an agreement with manufacturer Guangzhou Automobile to all-terrain vehicles [jeeps] in

Volkswagen is challenging General for the sales lead in China. currently holds over 20 of market share. The ten largest manufacturers want to increase from a total of 18 million in 2012 to 35 million in 2015. A of the already brutal struggle for domination is looming in China.

The in production of new cars flooding in recent years has led to a falloff of in the coastal cities of the so-called belt”. The rapid expansion of by 2015 will significantly this situation.

Another thorn in the side of the companies concerns wage which are higher in the coastal than in the provinces of central and China. The minimum wages, set by administrations in China, are based on the standards of living. The monthly wages in many parts of the province lie between 1160 and yuan (€142-162 or US$189-215), below the level of 1,620 (€198 or US$263) in Shanghai.

Volkswagen 2013

for cheaper labour and markets are not yet exhausted, VW and other brand-name manufacturers in China are increasingly into areas accustomed to standards of living and lower

In this respect, VW’s are in line with the policy of the Party of China (CPC), has long encouraged Western groups to respond to the slogan “Go and invest more in the west of the Transportation and logistics costs, for are already covered by the local


Friction between the Uyghur and Han communities in Xinjiang province has in recent years. The vast of the Uyghur, a Turkic people, in abject poverty, with 300,000 Uyghurs dwelling in the districts of the provincial capital, which has a population of over 2

The CCP deliberately promotes anti-Uyghurs to divert social tensions, the ethnic minority as an angry mob the Han.

VW is expected to hire Uyghur workers at the new VW plant. this has nothing to do with the work”, pledged by a VW supposedly to the integration of Uyghur workers. On the the poverty of the Uyghurs will be to reduce the wages and conditions of the of the workforce.

Pointing to the signs of slowing development, industry analysts Bill Russo, director of the Synergistics consultancy firm and a Chrysler manager, warned of levels of excess capacity” and pressure on profit margins” in the auto industry.

The International Fund predicts that the economy will grow by 7.75 percent this the lowest forecast since It expects a similar growth next year. This is than the traditional benchmark of 8 which the Chinese government necessary to keep unemployment control. Consultants from the Co. expect that China’s annual growth rate not exceed 8 percent until The growth rate averaged 24 from 2005 to 2011.

about VW’s reliance on the market are mounting in Germany. these signs, CFO Pötsch “China is an important market for us and we are very well”. Ferdinand of the University of Duisburg-Essen sees the differently, pointing out the extreme of carmakers relying on China for Volkswagen already sells 40 of its cars in China; this is to increase to 50 percent by 2020. As acknowledged, “If China coughs, VW pneumonia”.

Volkswagen 2013
Volkswagen 2013

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