A shipment of luxury cars has been impounded by US Customs following Chinese parts allegedly violating ‘forced labor’ laws.
Nearly 1000 vehicles from brands owned by Volkswagen Group have been impounded by US Customs delaying their arrival at dealerships and
customers for an indefinite period.
As reported by Financial Timesthe shipment of vehicles – including Bentleys, Audis and Porsches – was stopped in mid-January 2024 as they were apparently found to use an electronic component from western China.
Under US law, the importation of parts produced with alleged ‘forced labor’ in certain parts of China is prohibited.
While there is no precise timeframe on when the vehicles will be released, a statement from Volkswagen Group said the company was hoping to resolve the issue by March 2024 as replacement parts become available.
Volkswagen began building cars in China in 1985 through a joint venture with SAIC (Shanghai Automotive Industry Corporation) formed the previous year.
The joint venture now has 33 plants across the country having extended the partnership until 2035.
One of the factories is in Xinjiang’s capital, Urumqi, where fully assembled vehicles are inspected before shipment to dealers and customers.
The Xinjiang region in north-west China has come under recent scrutiny with German chemical company BASF confirming it will ‘accelerate’ its departure, closing two factories it operates there.
In December 2023, a statement from Volkswagen said an independent audit into its Xinjiang factory had cleared it of allegations of forced labor and the company would continue its operations in the area.
German news outlet Handelsblattwhich reported on a recently constructed test track built by the joint venture in the same region, has said the car maker is now considering ending operations in Xinjiang.
Volkswagen said it was in talks with SAIC about “the future direction of business” in the Xinjiang region, with “various scenarios being intensively examined.”
The German car maker said it takes allegations of human rights violations very seriously and may terminate any supplier relationship if a serious breach is uncovered.
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