German automotive giant Volkswagen’s market share in China has decreased from 19% in 2019 to 14.5% in 2023. The company expects this situation to remain unchanged in the short term. Last month, Volkswagen invested $5 billion in the US electric truck and SUV manufacturer Rivian, resulting in a surge in the stock price of this startup company.
According to Reuters, the cooperation with Rivian is part of Volkswagen’s US strategy. The joint venture with equal ownership between the two parties will develop software and other technologies for both car manufacturers. Volkswagen stated that it aims to attract new customers with products produced using the technology from this joint venture.
Volkswagen is facing challenges in Europe, the US, and especially in China, where Chinese electric car manufacturers led by BYD are eating into Volkswagen’s market share. Over the past two years, Volkswagen has suffered more stock value losses than any major competitor.
Volkswagen’s Chief Financial Officer Arno Antlitz told Reuters that the company expects to continue losing market share in China in the short term. Reuters reported that the troubles Volkswagen is facing in China highlight the bleak prospects for foreign car manufacturers in the Chinese market.
The China Passenger Car Association announced on July 8 that in the first six months of this year, foreign brands such as Tesla and Volkswagen accounted for 43% of China’s passenger car market, lower than the 50.5% share in the same period last year. Meanwhile, domestic Chinese brands have captured the majority of the market.
Although Volkswagen plans to launch over 30 new electric or hybrid models in China by 2030, with the goal of increasing sales from the current approximately 3 million vehicles to around 4 million and raising market share to 15%, it faces intense competition from Chinese electric car manufacturers supported by the Chinese Communist Party.
With about one-third of Volkswagen’s car sales coming from the Chinese market, the current market situation particularly affects this German giant.
This situation places a heavy burden on Volkswagen’s US business to achieve the company’s highest growth potential. By 2030, Volkswagen plans to more than double its market share in the US to 10%. However, the company also faces a series of challenges, including a lack of a unique American brand image or groundbreaking product plans. Nevertheless, a advantage Volkswagen has is that producing cars in the US can help avoid the electric vehicle competition between the US and China, as the US imposed a 100% tariff on Chinese-made electric cars in May.
Although Volkswagen’s sales have slightly increased in the US, more effort is needed to achieve its market share goals.
Volkswagen stated that the company plans to introduce over 30 battery electric vehicle models in the US market, but did not provide detailed information. It is known that Volkswagen will launch two electric vehicle models by the end of 2026, a pickup truck and an SUV, which will be produced at a new plant costing $2 billion in South Carolina.
Pablo di Si, head of Volkswagen’s US market, stated in an interview with Reuters in April that the company also plans to introduce new gasoline-powered SUVs and may launch new plug-in hybrid models.