Volkswagen eyes 15% China market share in 2030, bets on new hub, partnerships

Volkswagen aims to preserve its market share in China at about 15% in 2030, according to the head of its China business, Ralf Brandstaetter. This comes as the company faces increasing competition from local EV rivals. In 2022, Volkswagen ceded its title of the best-selling car brand in China to Chinese EV giant BYD, and its market share in China fell to 14.5% last year from 19.3% in 2020.

To combat this shift and maintain its competitiveness, Volkswagen has planned heavy investments in China, including a new research hub to develop more affordable EVs and partnerships with Chinese EV makers and suppliers to do the same. These strategies aim to help Volkswagen maintain or slightly increase its market share in China.

This 15% market share would correspond to selling 4 million cars in China annually by 2030, up from 3.07 million last year. Additionally, the company is targeting proportionate operating profit of more than 2 billion euros in China in 2027 and around 3 billion euros by 2030, up from 2.6 billion euros last year.

The CEO of Volkswagen, Oliver Blume, has acknowledged that the company cannot keep up with the top Chinese EV manufacturers but hopes to achieve a market share of more than 10% in China, which would still be considered respectable against fierce local competition.

Incumbents like Volkswagen have taken a hit in the country as it has undergone a significant shift from combustion engines to electric vehicles. Previously, foreign-made cars, particularly from Germany and Japan, were seen as the best global engineering had to offer. Now, Chinese counterparts have sped ahead in developing EV technology and have taken a significant share of the market.

Matthias Glodny, Volkswagen Group China's vice president for products, states that the company doesn't want to be a victim of the price war that has drawn in more than 40 car brands in China. Instead, it hopes to maintain its market share by fighting back and expanding its product range in China, attracting customers in the entry- and mid-level segments of EVs. This shift will help them attract customers and perform better in this competitive market.