Automotive News Europe — 2026-07-02
Automotive Industry
Global carmakers in China, from General Motors and Volkswagen to Hyundai and Nissan, once prized the country’s massive domestic market.
Now, they are shipping cars out of China as fast as they can.
Many international players now embrace a new mantra: Export or suffer.
They are succumbing to pressure as Chinese demand slumps, consumer preference shifts to domestic brands, and the market pivots to software-packed electric vehicles — an area in which overseas hopefuls struggle to compete.
Ford and Hyundai have turned China into an export base for internal combustion vehicles. GM and Nissan are leveraging China-developed electrified exports and China factories for overseas markets.
In June, Volkswagen, on the brink of the biggest restructuring in its history, with up to 100,000 layoffs worldwide, became the latest to join the tide.
Toyota, which has largely sat on the sidelines of the export trend, has seen its sales in China tumble for four straight months after holding steady last year because of its locally developed EVs sold domestically.
In the first five months of this year, the number of light vehicles — sedans, crossovers, SUVs, multipurpose vehicles and minibuses — shipped to the domestic market slumped 28 percent from a year earlier to below 6.8 million.
By contrast, China’s light-vehicle exports, mainly from domestic carmakers such as BYD, Chery and Geely, surged 70 percent to top 3.5 million, according to data from the China Association of Automobile Manufacturers.
VW is latest to turn to overseas expansion from Chinese production base
Last year, VW shipped only small volumes from China to Southeast Asia and the Middle East. Now, it actively seeks new export markets for its China-made vehicles. The latest destination: Uzbekistan, which the automaker announced June 22.
The first shipments to Central Asia’s most populous nation were sent in April and included five China-made Volkswagen-badged models — the Tiguan, Teramont and Tharu crossovers and the Passat and Lavida sedans. VW also shipped two Jetta-badged crossovers, the VS5 and VS7, the automaker said. Jetta, as a subbrand of the VW marque, was previously only sold in China.
VW plans to open 13 dealerships in Uzbekistan in 2026 and expand to 24 by 2028.
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VW Group, the largest foreign automaker in China, hopes sales to external markets will offset its plunging sales in China and soak up unused plant capacity. Its local deliveries slid to 2.9 million in 2025 from a peak of 4.2 million in 2019. In the first quarter of 2026, its China sales skidded 15 percent to below 550,000, according to the German auto giant. The troubles are a contributing factor to the brewing restructuring plan poised to sweep VW.
Chinese domestic brand exports have gained traction in overseas markets. But as VW’s ramp-up shows, established global players are also exporting locally made gasoline vehicles that are losing share in China. And increasingly, they also ship out locally developed, often electric or electrified vehicles. Sometimes, those vehicles leverage China’s latest software technologies.
VW hopes exports offset China woes amid corporate crisis
To tap Uzbekistan, Volkswagen Group created a joint venture with local automaker Alyans Auto to assemble vehicles for its namesake brand with semi-knocked-down kits imported from China.
The new venture is due to begin operation in Uzbekistani capital Tashkent later this year to build up to 20,000 vehicles annually, according to VW Group.
It’s a first step to “tap into high-growth markets with products made in China,” Robert Cisek, China CEO of VW brand, said in a statement. “Leveraging our footprint in China and our deep integration of the supply chain within the country, we can provide strong support for the brand’s global growth strategy.”
VW Group is also looking to export to other markets in Asia, South America and Africa.
Kia and Ford use China as an export hub for gasoline vehicles
Foreign-brand share of China’s light-vehicle market has imploded in just five years, to 30 percent in 2025 from 62 percent in 2020, according to the China Association of Automobile Manufacturers.
As demand for electrified vehicles began supplanting that for gasoline vehicles, Kia Corp. became the first foreign player to start producing vehicles in China for other markets, in 2018. Ford Motor Co. followed in 2022.
At the end of 2025, Kia shipped vehicles from China to 89 other countries. The strategy helped shipments from the South Korean carmaker’s China plants rebound for the second-straight year, gaining 2.3 percent to 254,000. Of that volume, 68 percent was exported, according to Kia’s China unit.
Ford shipped some 184,000 Ford and Lincoln models from China in 2025, doubling the number from 2022. Ford sent them to more than 80 countries, according to Ford’s China unit. The volume includes Ford models assembled in Vietnam and Cambodia with complete knock-down kits shipped from China.
Most other global carmakers have striven to boost exports from China in recent years. In 2025, Hyundai Motor Co.’s joint venture with BAIC Motor Co. exported some 66,000 vehicles, accounting for more than one-third of the partnership’s shipments that year.
Exports from SAIC-GM-Wuling, GM’s light-vehicle joint venture with SAIC Motor Corp., surged 19 percent to 267,000 vehicles in 2025. They accounted for 17 percent of the local output of SAIC-GM-Wuling, which mainly builds Wuling brand minibuses and compact pickups as well as Baojun-badged compact and subcompact sedans and crossovers.
International shipments propelled a 6.2 percent increase in overall sales at the GM joint venture to 1.6 million last year.
SAIC-GM, GM’s passenger-vehicle joint venture with SAIC that produces Cadillac, Buick and Chevrolet cars and light trucks, plans to expand exports during the next three years, President Lu Xiao told the company’s dealers in March, without providing further details.
In April, Nissan Motor Co. kicked off exports of its first two Nissan-badged vehicles developed in China: the Frontier Pro pickup, available in both gasoline and plug-in hybrid versions, and the N7 full-electric sedan.
Nissan aims to increase its annual sales of China-made vehicles to 1 million by 2030 from 653,000 in 2025 by launching more locally developed electrified models and boosting sales of exports from the country, said Stephen Ma, chairperson of Nissan’s management committee for China.
Toyota’s sales in China decelerate
Toyota Motor Corp. was the only global player to stabilize China sales in 2025. It delivered 1.8 million vehicles under the Toyota and Lexus brands, notching a 0.2 percent increase from a year earlier, on demand for locally developed bZ series electric models.
It’s also a rare holdout when it comes to relying on China as an export center.
But the Japanese carmaker’s China deliveries turned south in February. In May, volume plunged 37 percent year over year to 102,000 vehicles, and year-to-date volume slipped 15 percent to below 580,000.
Toyota, in a June 29 release, blamed the extended slump in China on “a challenging market environment including rising gasoline prices.”
Toyota’s sales plunge didn’t come as a surprise, as the Japanese carmaker derives the bulk of its China sales from internal combustion engine vehicles, according to Yale Zhang, managing director of Automotive Foresight, a Shanghai consultancy.
“High gasoline prices have caused a collapse in demand for [internal combustion vehicles], and all car companies relying on [such vehicles] for volumes are hit hard,” he said.
In addition to higher gasoline prices triggered by the Iran war, another factor contributed to Toyota’s sales plunge, Zhang said.
“Among major global automakers, Toyota is the only one that does not export from China,” he said. “Without exports, it is hard for a large carmaker in China to shore up its overall sales.”