Volkswagen AG (VW) will end its activities in Xinjiang, bowing to pressure from investors concerned about possible human-rights abuses in the western Chinese region.

The German carmaker’s local venture with SAIC Motor Corp will sell a plant in Urumqi to a unit of state-owned Shanghai Lingang Economic Development, VW said on Wednesday. The manufacturer will also extend its partnership with SAIC by a decade to 2040.

VW has fielded uncomfortable questions about its presence in Xinjiang due to allegations by the US and others that China is engaging in forced labour in the vast region. Beijing has vehemently denied the allegations, saying that the programme that aims to improve living standards for ethnic minorities has been misconstrued.

Automakers have repeatedly been caught in the crosshairs as their complex supply chain, which typically includes a sprawling web of suppliers and sub-suppliers, makes it easy to obscure a product’s origins. In February, US authorities blocked the import of thousands of Porsche, Bentley and Audi models because they contained a Chinese component that violated US anti-forced labour laws.

The Urumqi facility doesn’t manufacture any cars but makes final quality checks of already assembled vehicles that are then sent on to dealerships in the region. VW’s venture will also sell test tracks in Turpan and Anting to the same buyer.

Late last year, VW said independent auditors found no signs of forced labour at the joint-venture plant, prompting US rating agency MSCI to drop its “red flag” on the stock.

  - Bloomberg