2026: The Make-or-Break Year for Joint-Venture Automakers—Can Deep Localization Reverse Their EV Slump?

In 2025, FAW-Volkswagen led the joint-venture segment with sales of 1.58 million vehicles, yet Volkswagen Group’s overall sales in China have declined for two consecutive years. Among Japanese automakers, only Toyota saw a slight increase, while Nissan and Honda recorded their seventh and fifth straight annual declines, respectively. Facing the stark reality that domestic brands now account for 70% of the passenger vehicle market and joint ventures hold less than 5% share in the new energy vehicle (NEV) segment, automakers including Volkswagen, Toyota, and the BBA group (BMW, Benz, Audi) are accelerating their “In China, For China” strategies. These efforts include appointing China-based chief engineers, delegating R&D decision-making authority locally, forging deep partnerships with Chinese tech firms like XPeng and Huawei, and rapidly launching dedicated extended-range and battery-electric models. However, market responses have been mixed: Toyota’s bZ3X sells several thousand units per month, whereas the bZ4X manages only a few hundred; Nissan’s N7 had a strong launch, but its long-term performance remains uncertain. Despite rapid improvements in hardware, joint-venture brands still lag behind domestic EV startups in intelligent user experience, speed of iteration, and user engagement. The year 2026 will be a critical test of the effectiveness of their localization transformation.