Due to the ongoing slump in the world’s largest auto market in China, coupled with local car manufacturers continuously expanding their market share, German carmakers witnessed a sharp decline in sales in the second quarter in China. Sales data from companies showed that Volkswagen, Mercedes-Benz, and BMW all saw a year-on-year drop of at least 30% in sales volume in China.
According to a report by Reuters, Volkswagen announced on Friday, July 10, that its sales in China plummeted by a significant 36.6%. Marco Schubert, sales manager at Volkswagen, remarked, “The situation in the Chinese market remains challenging. Despite the initial success of our newly launched electric vehicles specifically developed for the Chinese market, we still cannot escape the overall market trend of about 20% decline.”
In 2024, Volkswagen lost its position as the top-selling car brand in China to the electric vehicle giant BYD. However, earlier this year, with Volkswagen’s launch of a product offensive focused on electric vehicles in China, the German automaker briefly regained the top spot.
The past success of German car brands in China was built on traditional fuel vehicles. However, analysts and industry insiders suggest that this traditional approach no longer resonates with younger, tech-savvy Chinese consumers.
Last month, BMW lowered its financial performance guidance for 2026, marking the third warning related to the Chinese market issued by BMW in less than three years.
BMW also cited the Middle East conflict driving up fuel prices as impacting Chinese consumers’ demand for fuel vehicles, on which BMW still heavily relies in the Chinese market.
In June, Chinese auto sales declined for the ninth consecutive month, prompting more and more car manufacturers to turn to export markets, including Europe.
Volkswagen, Mercedes-Benz, and BMW were unable to compensate for their losses in the Chinese market through sales in other regions during the second quarter, with their global sales declining by 8.6%, 8%, and 4.9%, respectively.
According to Yahoo Finance, the Volkswagen Group is preparing to halve its global product lineup to address its declining position in the Chinese market, rising costs, and lagging sales of electric vehicles.
Volkswagen’s “Future Plan” is a comprehensive program consisting of 12 measures aimed at achieving the “2030 Blueprint”. This includes gradually streamlining Volkswagen’s vehicle lineup by up to 50%, focusing on the most attractive markets, and reducing product complexity by up to 75%.