VW falls to No.3 in China, trailing BYD and Geely Auto
Legacy foreign automakers ceding share to local rivals
VW ramping up incentives to catch up with Chinese firms
BEIJING, Jan 12 (Reuters) - Volkswagen (VOWG.DE) was overtaken by Geely Auto (0175.HK) in sales in China last year, dropping to third place after losing its decade-long dominance in the world’s largest auto market to BYD (002594.SZ) in 2024, industry data showed.
Volkswagen’s two joint ventures in China with state-owned FAW and SAIC Motor (600104.SS) held a combined 10.9% share in terms of retail sales, down from 12.2% in 2024, China Passenger Car Association (CPCA) data showed on Monday.
Geely Auto’s (0175.HK) share of its home market rose to 11% from 7.7% in 2025, while BYD’s share fell to 14.7% from 16.2%.
CPCA secretary-general Cui Dongshu said the JVs represent all sales in China by Volkswagen, which remains the top-selling foreign brand in the country and has accelerated initiatives to catch up with Chinese competitors.
Legacy foreign automakers such as Volkswagen, General Motors (GM.N) and Toyota (7203.T) have ceded share to Chinese rivals due to a slower shift to electric vehicles, which Chinese consumers increasingly favour EVs due to state subsidies.
As well as an expanded partnership with Xpeng (9868.HK) to develop electronics architecture for more models in China, Volkswagen plans to develop its first in-house chip for next-generation smart cars in China with Horizon Robotics (9660.HK) .
Volkswagen is also looking to export cars developed and made in China to more overseas markets, where automakers including BYD are keen to expand to offset a sluggish home market.
Geely and other Chinese automakers such as Leapmotor (9863.HK) gained share last year, mainly in the budget car segment, as BYD found itself in the crosshairs of an industrywide call against intense competition.
The segment with cars priced below 150,000 yuan ($21,512) made up more than 50% of China’s new passenger vehicle sales last year. ($1 = 6.9729 Chinese yuan renminbi)

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Volkswagen has dropped to third place in China sales, overtaken by Geely Auto and trailing BYD. The company's market share fell to 10.9% from 12.2% in 2024, while Geely's share rose to 11%. Volkswagen is ramping up incentives and partnerships to compete with local rivals, focusing on electric vehicles and developing in-house technology. The shift in market dynamics reflects a broader trend of foreign automakers losing ground to Chinese companies, particularly in the budget car segment, which constitutes over 50% of new passenger vehicle sales in China.

- Volkswagen has fallen to third place in China's auto market, overtaken by BYD and Geely Auto, with a market share of 10.9% in 2025, down from 12.2%.  
- The decline reflects a broader trend where legacy foreign automakers are losing ground to local rivals due to a slow transition to electric vehicles favored by Chinese consumers.  
- Volkswagen is ramping up initiatives, including partnerships and in-house chip development, to regain its position in the competitive market.

Volkswagen drops to third in China sales as fast-growing Geely Auto overtakes