Core Insights - Volkswagen AG has fallen to third place in China's auto market, overtaken by Geely Automobile Holdings Limited, marking a significant decline for the German automaker in the world's largest vehicle market [1][9] - The shift in market leadership indicates increasing pressure on traditional foreign automakers as domestic brands strengthen their positions [1][3] Market Share Dynamics - Volkswagen's joint ventures in China accounted for a 10.9% share of retail vehicle sales, down from 12.2% in 2024, while Geely's market share increased to 11% from 7.7% in 2025 [2] - BYD remains the market leader but saw its share decrease to 14.7% from 16.2% [2] Competitive Landscape - Established global automakers like Volkswagen, General Motors, and Toyota are losing ground to Chinese competitors due to a slower transition to electric vehicles, as Chinese consumers increasingly favor EVs supported by government incentives [3] Strategic Responses - Volkswagen is enhancing its localization efforts in China, including partnerships with Xpeng and Horizon Robotics to develop electric vehicle technologies and smart vehicle chips tailored for the Chinese market [4] - The company is also exploring opportunities to export vehicles developed and manufactured in China to international markets, similar to strategies employed by Chinese automakers like BYD [5] Global Performance - Volkswagen delivered approximately 4.73 million vehicles globally, with around 382,000 fully electric vehicles delivered in 2025, reflecting a slight decline of 0.2% [6] - Battery-electric models constituted 8.1% of Volkswagen's total vehicle deliveries for the year [6] Competitor Performance - BYD achieved sales of 4.6 million vehicles in 2025, a 7.7% increase from 2024, with sales evenly split between fully electric vehicles and plug-in hybrids [7] - Geely sold 3.02 million vehicles, meeting its target, and has set a sales goal of 3.45 million vehicles for 2026, indicating a projected growth of about 14% from 2025 [8]
Volkswagen Falls to Third Place in China's Competitive Auto Market