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VW shares lower: Volkswagen faces sanctions in US – Chinese part causes problems |  03/06/24

VW shares lower: Volkswagen faces sanctions in US – Chinese part causes problems | 03/06/24

US trade policy with a list of sanctions against Chinese companies was the reason behind the initial suspension of thousands of luxury car deliveries from Volkswagen to the US.

The fault is a component called a LAN transformer, which is installed in Volkswagen's car control systems. These cars were to be delivered to the US from Europe and Mexico. The small component will be manufactured by China's Sichuan Jingweda Technology, a person familiar with the matter said. In December, the United States added the group to a list of companies suspected of using forced labor in China. The Chinese company reportedly outsourced the small part to another supplier and not directly to Volkswagen.

The automobile manufacturer must now halt US imports of Porsche, Audi and Bentley vehicles due to the blacklisting of Sichuan Jingweda Technology. Delays are expected to last until March while Volkswagen replaces components. The Chinese manufacturer declined to comment. Volkswagen confirmed that the problematic part is the lane transformer and that the Chinese company has been blacklisted since December. According to Volkswagen, the group is working to ensure compliance with its supply chain standards.

The Financial Times reported that Volkswagen Group cars were halted at US ports after the carmaker discovered an unnamed subcontractor had violated forced labor laws.

Via XETRA, VW's preferred shares lost 0.34 percent to 118.76 euros.

Beijing (Dow Jones)

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