VW luxury car imports held up after claims of ‘forced labour’ in China

Thousands of luxury cars – including Porches, Audis and Bentleys – have been impounded at US ports amid claims they contained parts made through forced labour in China.

The vehicles are made by German car maker Volkswagen, which is delaying deliveries after it was discovered they contain electronic components suspected of breaching anti-slavery laws, the Financial Times reported.

The suspect part had been sourced by a supplier in the VW supply chain and not by VW directly, it was claimed.
It came as Volkswagen was hit by additional claims from German media that it had benefitted from human rights abuses in China’s troubled Xinjiang region.

The US blocks imports of products made with forced labour in Xinjiang under laws passed in 2021.

Up to 1,000 Porches, “several hundred” Bentleys, which are handmade in the UK, and “several thousand” Audis were impounded, according to the FT.

VW said it “takes allegations of infringements of human rights very seriously, both within the company and in the supply chain” including “any allegations of forced labour”.

The carmaker said: “As soon as we received information of allegations regarding one of our sub-suppliers, we have been investigating the matter. We will clarify the facts and then take appropriate steps.

“These may also include the termination of a supplier relationship if our investigations confirm serious violations.”

Volkswagen said earlier it was considering the future of its joint venture with Chinese manufacturer SAIC Motors in Xinjiang. The two companies jointly own a factory in Xinjiang’s capital, Urumqi.

This followed separate claims that a car-testing track was constructed using the forced labour of Uyghur Muslims.
German newspaper Handelsblatt obtained photographs showing Uyghur workers in military uniforms during its three-year construction.

Researchers said this was a sign they were part of forced labour programmes, based on previous research.

The UN’s human rights office has said China’s discriminatory detention of Uyghurs and other mostly Muslim ethnic groups in Xinjiang may constitute crimes against humanity.

Beijing, which denies the allegations, says it is combating terrorism and extremism in the region.

Washington has banned any imports of products made with forced labour in the western Xinjiang region and other areas in China under the Uyghur Forced Labor Prevention Act of 2021.

A Human Rights Watch report this month warned carmakers were at risk of buying aluminium produced by victims of forced labour in Xinjiang.

Volkswagen said it was not previously aware of any indications of human rights abuses at the test track, which was built in conjunction with the carmakers’ jointly owned site in Urumqi.

When asked why the test site was not audited alongside with the Urumqi site last year, Volkswagen said that would not have been possible because the two sites were owned by different operating companies. It did not name the companies.

Stephan Weil, the premier of the German state of Lower Saxony – Volkswagen’s second-biggest shareholder – called the reports “concerning”, adding his government supported reviewing different scenarios for the business.

German fund manager Union Investment said the latest news meant Volkswagen no longer qualified for investment from its sustainable funds. “Today’s allegations have a new dimension. With that, Volkswagen is no longer investible for our sustainable funds,” Union Investment’s Janne Werning said in a statement.