Chinese investors and officials are considering buying shuttered German car factories, with a particular focus on those owned by Volkswagen, Reuters reported.
This move could strengthen China's presence in the German car industry.
Volkswagen is currently dealing with the challenges of the global economic downturn and the transition to sustainable technologies.
Building German factories would allow Chinese electric vehicle (EV) manufacturers to avoid tariffs imposed by the European Union on EV imports from China.
Private companies, state-owned entities, or partnerships with international companies could include candidates for German resources, the report said.
However, the Chinese government has the authority to approve or reject foreign investments, with decisions likely to be influenced by the new German government's position on China.
Volkswagen is considering relocating its factories in Dresden and Osnabrueck in Germany as part of a cost-saving drive to streamline operations.
Despite a decline in sales amid increased competition from Chinese companies, the automaker has faced unions in its effort to close several plants.
But, agreements reached last month to stop production at Volkswagen's Dresden and Osnabrueck sites by 2025 and 2027, respectively.
A person familiar with the matter told the news agency that Volkswagen is open to selling its Osnabrueck facility to a Chinese buyer.
A spokesman said: “We are committed to finding continued use for the site. The goal must be a workable solution that takes into account the interests of the company and its employees.”
A banker familiar with Volkswagen told Reuters that selling the factories could be more cost-effective for the carmaker than closing them, with possible sale prices between €100m ($103m) to €300m for each facility.
Chinese carmakers are actively exploring European locations for new manufacturing plants to avoid tariffs.
Companies such as BYD and Leapmotor have chosen to set up operations in countries with more favorable conditions, such as Hungary, Turkey and Poland, while Chery Auto is to start EV production in the former Nissan plant in Spain.
Different sources indicated that Chinese investors have also considered plants in Western Europe, including a Ford facility in Saarlouis, Germany, and an Audi Volkswagen plant in Brussels.
“Chinese companies eyeing German VW plants – report” was originally created and published by Just Autoa brand owned by GlobalData.
