Volkswagen Group announced on Wednesday that it was extending its 40-year partnership with Chinese carmaker SAIC Motor until 2040, while at the same time specifying that their joint venture included the divestment of sites in the Xinjiang region of northwest China.

The group explains that the Urumqi plant was divested for economic reasons, as was a testing station located in Turpan, in the same province.

In a press release, VW justifies its decision by its desire to reduce its production capacities in the thermal moors and to step up electrification.

But the region is also associated with a number of controversies linked to human rights and the use of local labor, controversies which have prompted some NGOs to invite consumers to boycott products manufactured locally.

In addition to these two sites in Xinjiang, the two partners also announced that they had divested another test track, this one located in Anting near Shanghai.

In addition to these divestments, Volkswagen and SAIC have declared their intention to accelerate their sales offensive, with the planned launch of 18 new models by 2030.

In terms of decarbonizing its activities, the joint venture also intends to reduce its CO2 emissions by 25% by 2030 compared with 2018.

Originally, the joint venture agreement between Volkswagen Group and SAIC Motor was not due to expire before 2030, but the two groups explain that they have decided to go ahead and renew their partnership in order to be able to generate steady growth in China and occupy a leading position in the market.

On the Frankfurt Stock Exchange, Volkswagen shares lost more than 1% on Wednesday morning in the wake of these announcements.

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