The carmaker also trimmed its long-term sales outlook, signalling the end of high-margin growth in the world’s largest car market.Volkswagen is bracing for even tougher competition in China, where the world’s largest car market could shrink for the first time in almost a decade, the head of the German carmaker’s business in the region said in a newspaper interview.
“It cannot be ruled out that we will see a decline in the Chinese market for the first time since 2018,” Volkswagen Group China CEO Ralf Brandstaetter told the FAZ newspaper in comments published on Wednesday.
According to the China Passenger Car Association, China’s passenger car market is expected to remain flat in 2026 after 24 million sales in 2025.
Brandstaetter described this as a “best-case scenario”.
In the long-term, Volkswagen now expects to sell 26 million cars annually by 2030, down from a previously forecast 28 million, said Brandstaetter.
The German group is battling to defend its position as China’s top-selling foreign automaker, rolling out dozens of new electric and hybrid models in the coming years in cooperation with local partners.
Homegrown brands have ended Volkswagen’s decades-long dominance in China, though it reclaimed the top spot in the first quarter as an end to Chinese government EV subsidies hurt rivals like BYD.
“But we certainly won’t be returning to the super-profits of years past,” Brandstaetter said. “Those days are over. Competition in China is now far too fierce for that.”
