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BEIJING, November 18 (TMTPOST) — Volkswagen Group China confirmed on Friday that its joint venture in China, Volkswagen Transmission Shanghai, has decided to stop producing manual transmissions for its vehicles from March 2023.

The serious challenge facing fuel car parts companies is that the auto industry is accelerating its transition to new energy vehicles.

Volkswagen Transmission Shanghai was established in 2001. Volkswagen (China) Investment Co., Ltd. holds 60% of its shares, and SAIC Group and China First Automobile Corporation（FAW Group) hold 20% respectively. SAIC Group and FAW Group are the main joint venture partners of Volkswagen Group in China, with SAIC-Volkswagen and FAW-Volkswagen as joint venture companies.

In a letter to employees, Volkswagen Transmission Shanghai said that the company produces manual transmissions only, and with the rise of new-energy powertrains like plug-in hybrids that almost exclusively use automatic transmissions and electric vehicles that mostly don't need transmissions at all, the need for manuals is disappearing. The company's product line, production scale, and the number of employees have been dwindling.

Since its creation in 2001, Volkswagen Transmission Shanghai has witnessed the development of China's auto industry. Despite efforts by the management, the shutdown and liquidation are inevitable. The company has formulated a draft of employee resettlement to ensure that the legitimate rights of employees are protected.

The transmission is one of the core components of a fuel car. With constant engine speed and torque, the transmission can change the driving force, driving speed, and direction of the vehicle, and stop the vehicle without shutting down the engine. Automotive transmissions are mainly divided into manual transmissions and automatic transmissions. The former requires the driver to manually operate the vehicle according to the driving conditions to shift the gear. Manual transmissions are generally used in entry-level models, and automatic transmissions are commonly used in mid to high-end models.

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