Volkswagen warns its place among the top brands in China cannot be maintained in the face of fierce competition from domestic manufacturers.
VW CEO Oliver Blume tells German newspaper Frankfurter Allgemeine Sonntagszeitung (FAZ) that the company has to drop its “utopian” dreams of staying among the top selling brands in a country where many domestic automakers enjoy state support and subsidies that allow them to slash sticker prices.
The situation is exacerbated by the growth of battery-electric vehicle sales against the various internal-combustion-engine models that VW sells in the market.
Blume tells the newspaper that a realistic ambition would be a market share of anything over 10% considering the advantages enjoyed by domestic producers. Of course, how shareholders will view this reduction of potential sales revenues as justification for trading with a nation viewed as having a bad civil rights record, including the suppression of religious minorities in Tibet and Xinjiang where VW has been accused of using forced labor in its plants, remains to be seen at the company's next general meeting.
Blume says VW “cannot keep up at the top of the table at the moment” in China’s market but that its standing will be improved with the planned release new models across a larger range in coming years. He adds: “If we reach a two-digit market share in the long-term in a rapidly growing Chinese market, that is already a very respectable goal.”
VW’s overall market share in China has been falling since its height of 18% in 2018 to just 14% in 2023 with the huge proliferation of affordable products from Chinese brands.
