Volkswagen Group has postponed restarting production of VW and Skoda vehicles built by its highly profitable SAIC-VW Chinese joint venture by a further week.
The move is a precautionary measure taken to prevent the further spread of the novel coronavirus. The outbreak contributed to an 11 percent decline in VW Group vehicle sales in China last month.
SAIC-VW, the group’s Shanghai-based, southern China JV, is now scheduled to resume work at its assembly plants from Feb. 24.
Last week Volkswagen said SAIC-VW would begin production on Feb. 17, but it updated the plans in a statement released on Monday.
“We are working hard on getting back to our normal production schedule, while facing delays due to national supply chain and logistics challenges as well as limited travel options for production employees,” Volkswagen Group China said.
When production resumes, preventative measures will be in place such as regular disinfection of working areas, distribution of masks to employees and temperature screening at the entrance of work facilities, VW said.
SAIC-VW is the German automaker’s most profitable Chinese joint venture. According to the latest annual figures for 2018, it earned a 15.9 percent pretax profit margin on the 28.9 billion euros ($31.3 billion) in revenue it generated from the sale of 2 million units.
More importantly, more of the earnings are booked at Volkswagen since the German automaker owns a 50 percent stake instead of 40 percent in the case of FAW-VW, the group’s northern JV operating out of Changchun.
SAIC-VW operates five main vehicle assembly plants throughout the country including the core Anting site that is being retooled to include production of the new MEB family of purpose-built electric vehicles.
The three vehicle plants managed by FAW-VW have already returned to production.
