VW sees China's car market under pressure in 2026: Forecast

But it's Manageable! VW Believes in Sluggish Development in China

2026-06-17 Source: dpa | Translated by KI 1 min Reading Time

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Volkswagen looks at the development of the Chinese vehicle market with caution for the rest of the year, it is said. Here's the explanation ...

The situation for Volkswagen in China is worsening, according to reports from Beijing. The reason stems from various developments. Nevertheless, it is believed that they are well-prepared ...(Image: Volkswagen) — The situation for Volkswagen in China is worsening, according to reports from Beijing. The reason stems from various developments. Nevertheless, it is believed that they are well-prepared ...
(Image: Volkswagen)

The Chinese automotive market is under increasing pressure, the Chinese part of the Volkswagen Group stated from Beijing. Additionally, it is not expected that the market will recover in the second half of 2026 and that losses can be regained. Wolfsburg (Germany) therefore anticipates that the overall market for new vehicles will drop to below 21 million vehicles. Volkswagen Group China cannot avoid this development and must endure it, it says. VW is merely adjusting its plans accordingly. However, further details about the mentioned adjustments were not disclosed.

Despite the Problems in China, VW Remains Rather Calm

These updates from VW were preceded by a report from China's Passenger Car Association (CPCA), which indicated a 19.5 percent decline in sales for the first five months of this year compared to the same period in 2025. Volkswagen cited changes in subsidy and tax policies, rising fuel prices, and ongoing price competition as reasons for the market's development— a mix of issues that influence consumer confidence and weigh on overall demand. At the same time, the VW Group remains optimistic, as vehicle sales in the area of electric cars continue to grow steadily. With strategic realignments and a model offensive for electric and plug-in hybrids, Wolfsburg (Germany) states it is well-positioned for the challenging market environment.

The logistics planning of VW Mexico uses AI to forecast a supply failure. (Image:Volkswagen AG)

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