Thousands of Volkswagen Group cars are waiting near the U.S. Customs Office at the border after one of their internal components was found in violation of the trade regulations. The only solution is to replace the component in all affected cars, which – considering the sheer size of the batch – may last through the rest of February and most of March, Financial Times reports.
The United States enforce a law called the Uyghur Forced Labor Prevention Act (UFLPA). It is intended to prevent importing goods that could potentially be made using forced human labor. All exporters from the Xinjiang–Uyghur Autonomous Region of China are required to provide ample proof that all the components in their products were made without such slave labor, otherwise they get banned at the customs.
This is exactly what happened to a few thousand of Audis, several hundreds of Bentleys and roughly a thousand Porsches this week. An element was identified in all these cars that was a part of a larger electronic control unit (ECU) produced in Ürümqi, the capital city of the Xinjiang district. Volkswagen has a joint venture with SAIC in that city.
Based on information obtained by Financial Times, the German automotive giant was unaware of the part it ordered from a third-party vendor being problematic in the United States. As soon as the issue was identified, the company notified the authorities about it. Negotiations are currently underway with SAIC to sort out the issue as soon as possible. The company is also conducting an internal investigation that may culminate with it severing all ties with the subcontractor at fault.
VW Group told in a comment to Fox Business that it was already preparing a plan to eliminate the logistic hurdles and delivery delays caused by this customs disaster. All affected customers will be contacted separately with the relevant details concerning this incident.