Published by Global Banking & Finance Review®
Posted on April 15, 2026
2 min readLast updated: April 16, 2026
Add as preferred source on GoogleVolkswagen’s China chief warns that China’s passenger car market may shrink in 2026 for first time since 2018, with only flat growth forecast and long‑term sales targets reduced amid mounting domestic competition and softer demand.
(Corrects paragraph 5 to reflect total market forecast, not Volkswagen sales)
BERLIN, April 15 (Reuters) - Volkswagen is bracing for even tougher competition in China, where the world's largest car market could shrink for the first time in almost a decade, the head of the German carmaker's business in the region said in a newspaper interview.
"It cannot be ruled out that we will see a decline in the Chinese market for the first time since 2018," Volkswagen Group China CEO Ralf Brandstaetter told the FAZ newspaper in comments published on Wednesday.
According to the China Passenger Car Association, China's passenger car market is expected to remain flat in 2026 after 24 million sales in 2025.
Brandstaetter described this as a "best-case scenario".
In the long-term, Volkswagen now expects 26 million cars to be sold in China annually by 2030, down from a previously forecast of 28 million, said Brandstaetter.
The German group is battling to defend its position as China's top-selling foreign automaker, rolling out dozens of new electric and hybrid models in the coming years in cooperation with local partners.
Homegrown brands have ended Volkswagen's decades-long dominance in China, though it reclaimed the top spot in the first quarter as an end to Chinese government EV subsidies hurt rivals like BYD.
"But we certainly won't be returning to the super-profits of years past," Brandstaetter said. "Those days are over. Competition in China is now far too fierce for that."
(Reporting by Rachel More in Berlin and Qiaoyi Li, Editing by Madeline Chambers)
Volkswagen is seeing increased rivalry in China due to slowing market growth and stronger local automakers challenging its dominance.
Volkswagen now expects to sell 26 million cars annually in China by 2030, down from its previous forecast of 28 million.
The end of Chinese government EV subsidies has hurt rival automakers like BYD, allowing Volkswagen to reclaim the top spot in the first quarter.
The Chinese car market could shrink for the first time since 2018, with flat or declining sales projected.
Volkswagen is rolling out dozens of new electric and hybrid models with local partners to defend its top position in China.
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