Volkswagen confirms withdrawal of China's Xinjiang plant..."End of controversy over human rights violations"

Germany's Volkswagen Group, Europe's largest automaker, has decided to withdraw its plant in China's Xinjiang Uyghur Autonomous Region, Reuters reported on Thursday.

The plant, which opened in 2013, has been under pressure from Volkswagen shareholders to sell for years over a wide range of human rights violations, including forced labor in camps.

Volkswagen has decided to sell the plant to the Shanghai Automotive Verification and Technology Innovation Center (SMVIC), a subsidiary of China's state-owned Shanghai Lingang Group, according to the news agency.

Details such as the sale amount are not yet known.

Reuters explained that sluggish sales in China were a major factor in the decision to sell.

In China, BYD's electric vehicles have recently become popular and the domestic market has lost power due to the prolonged economic downturn.

Volkswagen, however, is free from controversy over human rights violations due to the sale of the plant.

"The economic impact from the plant sale will be minimal," said Decca Investment Fund, one of Volkswagen's top 20 shareholders, adding it welcomed the critical decision.

Another investor (shareholder) Union Investment emphasized, "The withdrawal of the Xinjiang plant should have been done earlier, and human rights are an irreconcilable issue."

When Volkswagen's withdrawal was announced, local media in China reported the extension of the contract between SAIC Group and Volkswagen Group and news of a new car launch, rather than mentioning the decision to sell it due to human rights controversy.