Volkswagen has slipped to third place in China’s automotive market, overtaken by Geely Auto after losing its decade-long dominance to BYD in 2024, according to industry data.
Figures from the China Passenger Car Association (CPCA) reveal that Volkswagen’s two joint ventures with state-owned FAW and SAIC Motor held a combined retail market share of 10.9%, down from 12.2% in 2024. Meanwhile, Geely Auto boosted its share to 11%, up from 7.7% in 2025, while BYD’s share declined slightly to 14.7% from 16.2%.
CPCA secretary-general Cui Dongshu confirmed that these joint ventures account for all Volkswagen sales in China. Despite the setback, Volkswagen remains the leading foreign brand in the country and is accelerating efforts to close the gap with domestic competitors.
Legacy foreign automakers such as Volkswagen, General Motors and Toyota have been losing ground to Chinese rivals due to a slower transition to electric vehicles (EVs). Chinese consumers increasingly prefer EVs, supported by government subsidies.
To regain momentum, Volkswagen is expanding its partnership with Xpeng to develop advanced electronic architecture for future models in China. Additionally, the company plans to design its first in-house chip for next-generation smart vehicles in collaboration with Horizon Robotics.
Volkswagen is also exploring opportunities to export China-developed vehicles to overseas markets, a strategy shared by BYD and other Chinese brands seeking growth beyond a cooling domestic market.
Geely and other Chinese automakers, including Leapmotor, gained significant traction last year, particularly in the budget segment. This segment, comprising vehicles priced below R410 000 (US$21 512), accounted for more than half of China’s new passenger car sales in 2025.
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