Germany's big carmakers used to lead the race in China, but now they're 'for the parents'

BEIJING, April 21 (Reuters) - More than 40 years aft Volkswagen stole the amusement astatine its archetypal Chinese car fair, it has mislaid its cutting-edge presumption successful the country, with homegrown brands mounting the gait for a younger procreation of tech-hungry drivers.

The combustion-engine practice of "Made successful Germany" nary longer holds arsenic overmuch ‌sway successful what has go the world's largest car market, wherever section automakers are rolling retired flashy, affordable electrical vehicles that are fundamentally mobile phones connected wheels.

"Maybe ‌some younger customers comprehend america arsenic the marque for the parents," the Volkswagen brand's China CEO, Robert Cisek, told Reuters.

Blindsided by the meteoric emergence of Chinese brands, income astatine Volkswagen, on with its Porsche and Audi units, ​and rivals BMW and Mercedes-Benz person each tumbled, leaving them scrambling to staunch the bleeding successful a marketplace that utilized to relationship for a 3rd of their sales.

After spending a 4th of a period arsenic China's No. 1 automaker, Volkswagen was overtaken by EV heavyweight BYD successful 2024 and knocked into 3rd spot by Geely successful 2025.

The translation of China's car marketplace for these companies - from maturation operator to battleground - has been "beyond imagination," Cisek said.

FROM MARKET PIONEERS TO EV LAGGARDS

When Volkswagen attended its archetypal Chinese car amusement successful Shanghai successful 1985, locals were impressed by the prime ‌of the German automaker's selling materials.

"We were met by an unimaginably ⁠huge assemblage and our brochures flew disconnected the shelves," then-CEO Carl Hahn, who oversaw the company's introduction into China, wrote successful his memoirs. "For radical astatine that time, it was capable simply to marvel astatine the prime of the insubstantial and people and to imagination astir owning a car."

Now, ⁠the German car radical needs much than conscionable glossy insubstantial to signifier a comeback astatine this year's Beijing Auto Show, which kicks disconnected connected Friday.

Having dominated combustion-engine car production, automakers similar Volkswagen find themselves racing to drawback up successful a marketplace wherever much than 1 successful 4 caller cars is afloat electric.

As China's car marketplace grew and section brands launched a plethora of consumer-friendly EVs, German carmakers ​lost ​ground. Collectively, their income fell by a 4th implicit a five-year play to 3.9 cardinal vehicles successful 2025, ​according to S&P Global Mobility data.

The challenges person intensified this twelvemonth ‌as Chinese brands marque inroads successful the premium segment, targeting wealthier consumers who erstwhile coveted German quality, analysts said.