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Investing.com – Volkswagen stock (DE:VOWG) traded 1.3% lower in Germany after Covid outbreaks forced the company to suspend production at two of its plants in Chinese port city of Tianjin.
One plant is jointly run by the company with China’s FAW Group while the other is an automatic transmission component factory.
The decision by the German company follows a similar move by Toyota (NYSE:TM) which Monday halted production at its factory in the port city, which is around 62 miles from Beijing. The Chinese capital is scheduled to host the Winter Olympics February 4 onward.
Authorities in Tianjin have clamped down on people’s movement, asking citizens to stay indoors. They began mass testing its 14 million residents last Wednesday to contain the Omicron variant, Reuters said.
Volkswagen will be looking at a quick resumption of output at the plants as it tries to make up for missing its sales targets in 2021. It aims to double sales of its ID battery electric vehicles in the world’s largest market for automobiles.
The ID series, which Volkswagen produces under joint ventures with China’s SAIC Motor (SS:600104) and FAW, is at the heart of its EV ambitions in China. The automaker sold 70,625 of its ID electric vehicles in China last year, missing its goal of selling 80,000-100,000 cars, according to Reuters.
The Group, which also sells luxury brands like Audi, Lamborghini and Porsche, sold 3.3 million cars in China last year, down 14%.
