VW market share in China falls after sales slump in 2021

Status: 11.01.2022 09:28 a.m.

The Volkswagen Group has suffered a setback in its most important sales market. In China, sales fell significantly in the past year. Only sports cars sold better.

While the overall market for cars in China grew by four percent in 2021, the sales figures of the largest German car company in its most important sales market fell significantly. The Volkswagen Group’s sales fell by 14 percent last year in the People’s Republic, as the incumbent VW China boss Stephan Wöllenstein reported to journalists in Beijing. According to Wöllenstein, this is primarily due to the lack of semiconductors and problems in the supply chains. “It was a pretty difficult year,” said Wöllenstein.

Because the overall market grew despite the problems for the manufacturers, the share of Volkswagen brands in China shrank to eleven percent. In previous years it had always been between 14 and 15 percent.

Solid models worry

A look at the individual group brands shows that the volume brands Volkswagen and Skoda in particular were affected by the decline. In contrast, the Audi brand was able to hold its own somewhat better with a minus of 3.6 percent. Only the sports cars from Porsche posted an increase in sales of eight percent in China, luxury cars from the Bentley brand even sold 43 percent better than in 2020.

Like the other German manufacturers, VW is struggling with several developments in China. For the lucrative sales market, there is ever tougher competition among international car companies. In addition, there are more and more cars from Chinese manufacturers. For good reason, because VW sells around 40 percent of its vehicles in China. And a large part of the Group’s earnings also come from the Middle Kingdom with its gigantic potential.

Car manufacturers need to invest quickly

On the other hand, China is exerting more and more influence on the structure of its automobile market. Since this year, China has made it possible for foreign corporations to invest more in their own auto industry. The German carmakers have already announced investments.

BMW recently announced that it would expand its presence in China and produce even more models in the country. In the first quarter of next year, BMW intends to increase its share in the joint venture with the Chinese partner by 25 percent. The Munich-based automaker would then control 75 percent of the joint venture and would be the first Western automaker with this privilege. Daimler and Volkswagen have also expressed the wish to take over the majority of their Chinese joint ventures.

Last but not least, China has also become the most important market for electric cars and is driving the trend towards e-mobility. Accordingly, Volkswagen recorded an increase in sales of the electric models in the ID series towards the end of the year. However, the group also missed the target for 2021 of selling 80,000 to 100,000 e-cars in China with “slightly more than 70,000”. According to Wöllenstein, the aim is to at least double sales of the models with electric motors this year.

VW manager is replaced

VW also wants to launch an attack again this year with the other group brands: demand is still there, according to the manager. While the overall market is expected to grow by four percent, Volkswagen intends to grow by 15 to 16 percent. The hoped-for turnaround will only accompany Wöllenstein until the middle of the year. VW’s China boss will be replaced in August.


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