Volkswagen flags Chinese competition in Brazil, sees limited Iran impact
Volkswagen's Strategic Outlook Amid Market and Geopolitical Challenges
By Rodrigo Viga Gaier
Chinese Competition in the Brazilian Auto Market
RIO DE JANEIRO, May 18 (Reuters) - Volkswagen is concerned about declining resale values of its vehicles as lower-priced Chinese competitors expand in the Brazilian market, the company's head in Brazil, Ciro Possobom, told Reuters on Monday.
Volkswagen's Position on Price Wars
"While new entrants are entering aggressively and putting downward pressure on prices, we believe we are well positioned," Possobom said, adding that the company will not engage in a price war with Chinese competitors.
Growth of Chinese Automakers
Chinese automakers have rapidly expanded in Brazil, gaining market share with lower-priced electric and hybrid models and intensifying competition in the region's largest auto market.
Impact of Iran Conflict on Volkswagen Operations
He added that the war in Iran has had both direct and indirect impacts on Volkswagen's operations, but despite the geopolitical tensions, supply chain disruptions remain manageable and have not led to vehicle price increases.
Supply Chain Adjustments
Volkswagen has resorted to flying in some components as shipping routes through the Strait of Hormuz face uncertainty. "We hope the war ends soon, especially since we import about 20% of the parts," he said.
Production and Pricing Outlook
The company does not expect parts shortages to significantly affect production or pricing for now, Possobom added.
Recent Performance in Brazil
Possobom was positive on the group's recent performance, saying April was a strong month for the automaker in Brazil, outperforming results from the first quarter of 2026.
(Reporting by Rodrigo Viga Gaier; Writing by Isabel Teles; Editing by Kylie Madry)
