FRANKFURT/BERLIN, Germany: Chinese automakers and officials are showing interest in acquiring German factories slated for closure, including those owned by Volkswagen, according to a source familiar with Chinese government thinking.

Such a move would allow Chinese firms to expand their footprint in Germany's renowned auto industry while avoiding European Union tariffs on electric vehicles imported from China.

Volkswagen, facing increased competition from Chinese electric vehicle (EV) makers and a global economic slowdown, is evaluating alternative uses for its Dresden and Osnabruck plants as part of a broader cost-cutting strategy.

While the Dresden plant is set to cease production of the electric ID.3 by 2025, the Osnabruck facility will end production of the T-Roc Cabrio by 2027. A person familiar with Volkswagen's plans indicated the company is open to selling the Osnabruck site to a Chinese buyer.

"We are committed to finding a continued use for the site. The goal must be a viable solution that takes into account the interests of the company and employees," a Volkswagen spokesperson said, without commenting specifically on potential Chinese interest.

A source with knowledge of the matter said Chinese investors view Germany's car industry as a long-term strategic opportunity. However, they are cautious about navigating Germany's strong labor unions, which hold significant sway over corporate decisions.

Stephan Soldanski, a union representative from the Osnabrck plant, expressed openness to collaboration with Volkswagen's Chinese joint venture partners. "I could imagine that we would produce something for a China joint venture but under the VW logo and under VW standards. That is the key condition," he said.

China's broader strategy involves establishing EV production in Europe to bypass tariffs and cater to local markets. While some Chinese automakers, like BYD and Leapmotor, are setting up facilities in lower-cost countries, Germany remains a prime target due to its reputation and consumer base.

A spokesperson from China's foreign ministry emphasized the importance of open and fair investment opportunities in Germany. "It is hoped that the German side will also uphold an open mind, (and) provide a fair, just, and non-discriminatory business environment for Chinese firms to invest," the statement said.

For Volkswagen, selling plants to Chinese buyers could be a cost-effective alternative to closure, with each factory potentially valued between 100 million euros and 300 million euros. Meanwhile, Chinese automakers are weighing whether to acquire existing facilities or build new ones tailored to modern EV production standards.