Volkswagen and BMW Hit by Sharp Sales Declines in China, Accelerate EV Shift to Counter Rising Local Brands

In 2025, Volkswagen, BMW, and Mercedes-Benz all experienced declining sales in China: Volkswagen’s sales dropped by 8% year-over-year, falling to third place in the Chinese market and being overtaken by BYD and Geely; BMW’s sales plummeted by 12.5%; and Mercedes-Benz sales declined by 19% to 575,000 units. Despite a 32% year-over-year increase in global EV deliveries, Volkswagen saw its battery-electric vehicle sales in China plunge by over 40%, with internal combustion engine vehicles still dominating its portfolio. Meanwhile, Chinese domestic brands have captured nearly 70% of the market share. To counter intense competition, Volkswagen plans to launch more than 20 new energy vehicle models in China by 2026, BMW will introduce around 20 new models, and Mercedes-Benz will focus on China-specific models, accelerating its electrification and localization strategies.