Skoda Fully Exits China Market as Volkswagen Group Admits Competitive Setback

Hit hard by intense competition from domestic Chinese automakers, Škoda, the Czech brand under the Volkswagen Group, has officially announced its exit from the Chinese market, with local sales set to cease by mid-2025. Once China’s largest single market for Škoda, the country saw the brand’s annual sales plummet from a peak of 341,000 units in 2018 to just 15,000 units in 2025—a staggering drop of nearly 96% over seven years. Despite its collapse in China, Škoda is performing strongly globally: in 2025, it achieved global sales of 1,044,000 vehicles, up 12.7% year-on-year, marking a six-year high. The brand also became Europe’s third best-selling automotive marque for the first time and made significant gains in markets such as India, North Africa, and Turkey. Accelerating its electrification strategy, Škoda plans to launch two new all-electric models this year—the entry-level SUV Epiq and the seven-seater Peaq. Škoda’s retreat underscores the severe challenges traditional automakers face in China’s fiercely competitive market. Meanwhile, the Volkswagen Group is shifting focus toward strengthening its core Volkswagen brand and deepening partnerships with local Chinese companies. However, its newly established premium joint venture between Audi and SAIC Motor is already showing signs of weakness.