Auto makers deny reports of output halt

SHANGHAI Volkswagen yesterday denied earlier media reports which said the car maker and FAW-Volkswagen halted production due to high inventories amid slowing car sales in the world's second-largest auto market.

But the car maker has been reducing its production of some existing products to pave the way for the launch of new models, according to an official from Shanghai VW.

"There has been some maintenance work carried out at the assembly lines, which will last till early next year," the source said. "The maintenance is part of measures to set aside production capacity for our new Skoda Fabia compact car. When the maintenance is completed, the output volume will return to normal."

The official said that the work is "a regular year-end adjustment, which usually takes some lines out of production by rotation during a week-long period."

The global economic downturn has deterred Chinese consumers from buying cars. Last month, car sales in China fell 14.56 percent from a year ago to 685,100 vehicles, the China Association of Automobile Manufacturers said.

Shanghai VW, the venture with SAIC Motor Corp, sold 450,000 units in the first 11 months and raised its market share to 9.2 percent. Last year, it sold 435,000 units, the official said.

However, other Chinese car makers have been lowering their sales target and cut jobs as they struggled with high inventory and less profitability. Some of them have also laid off workers and seek government subsidies.

Dongfeng Peugeot Citroen Co Ltd has cut nearly 1,000 jobs while Chery Automobile Co got a 10-billion-yuan (US$1.5 billion) loan from the Export-Import Bank of China.