The VW Group finds itself in hot water as thousands of luxury Porsche, Bentley, and Audi models have been impounded at U.S. ports, according to a new report. This action comes after the revelation that a Chinese component used in these vehicles breaches anti-forced labor laws.
Unnamed individuals with knowledge of the matter told the Financial Times that the VW Group was unaware of the origin of the part, as it comes from an indirect supplier deep within its supply chain. The issue only came to light after the supplier alerted the group, prompting a delay in the delivery of vehicles until as late as the end of March while the part is replaced.
Read: Audit Finds No Evidence Of Forced Labor At VW And SAIC’s Xinjiang Factory
The Financial Times reports that the VW Group notified U.S. authorities of the part’s origin.
Under the Uyghur Forced Labor Prevention Act of 2021, products manufactured with forced labor in China’s Xinjiang region, among other areas, are prohibited from importation into the United States. While the precise origin of the part has not been disclosed publicly, it is believed to have originated from ‘western China.’ Impounded vehicles include around 1,000 Porsche models, hundreds of Bentleys, and several thousand Audi models
“As soon as we received information of allegations regarding one of our sub-suppliers, we have been investigating the matter,” VW said in a statement. “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.”
VW has notified owners of the affected vehicles via a letter, explaining that the problematic component is a “small electronic component that is a part of a larger control unit, which will be replaced.” However, the letter did not disclose the component’s origin.
“Deliveries continue, however some unavoidable delays may occur, for which we apologize. We are contacting each customer to keep them informed,” the automaker told Fox Business in a statement,
“Volkswagen takes allegations of infringements of human rights very seriously, both within the company and in the supply chain. Of course, this also includes any allegations of forced labor,” Volkswagen added. “When we receive information on human rights risks or potential infringements, we strive to remedy them as quickly as possible. As soon as we received information of allegations regarding one of our sub-suppliers, we have been investigating the matter.”
This is not the first time the VW Group’s business in the Xinjiang region has been under the spotlight. The German carmaker currently operates a joint venture facility in the Xinjiang capital of Urumqi with SAIC and earlier this week, said it would discuss “the future direction of business” in the region after claims of forced labor were made in the German press.
The carmaker has already started to fix the cars stuck at ports but clearing the backlog could take several weeks.
