The executive leading Volkswagen’s operations in China is sounding the alarm about intensifying market pressures as the world’s biggest automotive market shows signs of potential decline.
Ralf Brandstaetter, who serves as Volkswagen Group China CEO, indicated that a market contraction could occur for the first time since 2018. “It cannot be ruled out that we will see a decline in the Chinese market for the first time since 2018,” Brandstaetter stated during an interview with FAZ newspaper published Wednesday.
Market projections from the China Passenger Car Association suggest the passenger vehicle sector will see stagnant growth, with expectations of flat performance in 2026 following anticipated sales of 24 million units in 2025.
Brandstaetter characterized these projections as a “best-case scenario” for the industry.
The challenging market conditions have prompted Volkswagen to adjust its long-range outlook, with the company now targeting annual sales of 26 million vehicles by 2030 – a reduction from its earlier projection of 28 million units, according to Brandstaetter.
The German automotive giant is working to maintain its status as China’s leading foreign car manufacturer by introducing numerous electric and hybrid vehicle models through partnerships with local companies.
While domestic Chinese manufacturers have disrupted Volkswagen’s long-standing market leadership, the company managed to regain its top position during the first quarter as the conclusion of government electric vehicle incentives impacted competitors such as BYD.
However, Brandstaetter tempered expectations about future profitability. “But we certainly won’t be returning to the super-profits of years past,” he explained. “Those days are over. Competition in China is now far too fierce for that.”
