The Volkswagen Passat will be discontinued in the US after the upcoming 2022 model year. Built in Chattanooga, Tennessee, the Passat's retirement will enable the automaker to begin building en masse the ID.4 and other future all-electric models. In China, sedans in general are popular and VW has a 50/50 joint venture set up there for local Passat production. Should be a recipe for success, right? It was, but not so much anymore.

Reuters reports the backstory of how the Passat is failing in the world's largest automotive market and VW as a whole now faces struggles there. We should note that China's Passat is not the same as America's which is built on an older, larger platform. It all began back in December 2019 when the Chinese-built Passat failed an unofficial crash test performed by an insurance industry body called CIRI Auto Technology.

However, the sedan passed the Chinese government's C-NCAP test, which is modeled after common European testing. Unfortunately for VW, the video (included here) showing the crash and the mangled result went viral, leading to widespread consumer backlash. Notice the Passat's A-pillar literally getting snapped off, thus rendering it useless for any sort of structural protection. Heck, even the driver's head missed the airbag when it deployed.

Because this was an unofficial test, VW wasn't obligated to act, but it did so anyway by sending a team of engineers to China to solve the problem. They concluded an additional 400 yuan ($62) had to be spent per vehicle for the extra metal components.

It may not sound like much money, but it amounts to tens of millions of dollars for the hundreds of thousands of vehicles that would ultimately be affected. VW is proceeding with the fix because it has no choice. Not succeeding in China would be financially devastating because VW needs the revenue to help fund its $42 billion transition to EVs.

And now VW must repair its image following the video's release by convincing Chinese consumers its cars are safe. Sales of the Passat have since dropped 32 percent but the pandemic also played a role in that. Overall new vehicles deliveries decreased by 6.8 percent in the same period but, again, Covid-19 played a role.