Volkswagen's China sales hit 16-year low: What's the reason?
What's the story
Volkswagen Group has reported a major decline in its vehicle deliveries in China, the world's largest automotive market. The company's sales fell by 26.1% year-on-year to 971,000 units in the first half of 2026. This is the lowest number of vehicles sold by Volkswagen in China since the first half of 2010 when it delivered around 950,300 units.
Market dynamics
Local EV brands drawing customers away from Volkswagen
The decline in Volkswagen's sales can be attributed to the growing popularity of local electric vehicle (EV) brands. These companies have been able to attract customers away from traditional petrol cars, further complicating the German automaker's position in a slowing market. The company's global deliveries also fell by 6% year-on-year to 4.13 million units during this period.
Strategic adjustments
An 8% growth in South America
Marco Schubert, a member of Volkswagen's extended executive committee for sales, acknowledged the difficulties in China. He said they couldn't escape a total market decline of about 20%. However, he noted that an 8% growth in South America and a 3% rise in Western Europe only partially offset this decline.
Market overview
Overall passenger car sales also fell
The decline in Volkswagen's sales is part of a larger trend, with overall passenger car sales on the mainland also falling by 20.2% year-on-year to 8.7 million units in the first half of 2026. The data was provided by the China Passenger Car Association (CPCA), highlighting the challenges faced by all automakers, not just Volkswagen, in this competitive market.