(Reuters) – Volkswagen and its Chinese joint venture partner SAIC plan to close at least one plant in China due to slow demand for combustion engine cars, Bloomberg News reported on Wednesday, citing people familiar with the matter.

The first plant threatened with closure – as soon as next year – is its site in Nanjing which produces VW Passat and Skoda cars, according to Bloomberg.

Volkswagen said it does not comment on speculation. SAIC was not immediately available for comment.

The German carmaker, long the top-selling automaker in China, is suffering from a decline in its market share in the country and is working with SAIC and other partners such as Xpeng to bring new models on the market it hopes will be more competitive.

Reuters reported earlier this year that SAIC aimed to cut 10% of jobs this year at SAIC Volkswagen and other partners, facing steep drops in sales as BYD and Tesla have surged far ahead in the race to capture EV market share.

(Reporting by Victoria Waldersee, Zhang Yan, Editing by Madeline Chambers)