Automotive News Europe — 2026-01-29
Automotive Industry
Volkswagen Group plans to increase exports of cars made in China as the automaker tries to benefit from the Asian country’s low production costs amid a bruising price war there.
VW has started shipping vehicles from China to the Middle East and Southeast Asia. It’s also eyeing selling its new Chinese models in Africa and South America, CEO Oliver Blume told reporters in Berlin.
“The technologies and products developed in China open up new export opportunities for us — in regions that we previously could not effectively serve from Europe,” Blume said. “This is an important strategic lever for the Volkswagen Group.”
The automaker has been overhauling its presence in China to better compete in a market where local automakers led by BYD have taken over in electric vehicles. The company has slashed manufacturing costs by shifting more research and development to China and by partnering with local software manufacturer Xpeng.
VW plans to introduce 20 new electrified vehicles in the world’s biggest car market this year. The push is meant to help arrest a sales slide that slashed the company’s Chinese deliveries to around 2.7 million last year, from more than 4 million before the pandemic.
Porsche hit by slump in China
The slump in China has been especially bruising for VW Group’s Porsche, with the brand’s sales in the country cratering amid muted luxury demand. Porsche produces only in Europe and has struggled with trade hurdles in the U.S. and China.
“The entire premium and luxury market in China has collapsed by around 80 percent in a short period of time, and we do not expect a recovery,” said Blume, who until last month also ran Porsche.
Instead, VW is betting on a new electronics architecture designed with Xpeng to cater to local tastes. Production of the first model using the new underpinnings is underway, the company said Jan. 28. It did not give a price for the ID UNYX 07, an electric sedan that will start deliveries this year.
Still, pricing will be key to claw back market share in China. Competition in the country remains intense, VW’s China chief Ralf Brandstätter said at the same event, adding that sticker prices have mostly stabilized. Rather than waiting for them to bounce back, which probably will not happen, the company has adapted its cost structure “to make money in this environment with our new models,” he said.
VW is under pressure to move quickly. The Chinese slump, the burden of U.S. tariffs and uneven demand in Europe prompted Blume to pursue a restructuring that includes cutting tens of thousands of jobs and adding more hybrid models.
For China, VW expects 2026 to be a transition year during which it’s pursuing growth in electrified vehicles but may not improve absolute sales volumes. Still, it wants to remain one of the three biggest automakers in the country and by 2030 increase its market share to 15 percent, from around 11 percent currently.
“There is no other region in the world where the transformation of our industry is taking place more consistently, dynamically, or rapidly,” Blume said. “Only those who succeed in China will be successful elsewhere in the world.”