Volkswagen shifts China strategy to focus on overseas markets

Volkswagen is shifting its China strategy to focus more heavily on exports as it grapples with weak demand in the world's largest car market and growing competition from Chinese manufacturers abroad.

The German automotive giant is replacing its previous "In China, for China" strategy with a new approach dubbed "In China, Beyond China," the company announced in the eastern Chinese city of Hefei on Wednesday.

Volkswagen said the move would establish China not only as one of its most important markets but also as a key innovation and export hub for its global operations.

The company plans to use its Chinese joint ventures to expand into markets in South-East Asia, southern Africa and South America. 

The company already exports vehicles manufactured in China to destinations including the Middle East, Kazakhstan and Uzbekistan.

Under the new strategy, technology developed in China will serve as the basis for petrol, electric and hybrid vehicles destined for emerging markets.

Until now, the company's Chinese production operations have largely focused on supplying the domestic market, with exports playing a limited role. However, intense competition from Chinese brands, mounting price pressure and weakening demand have prompted a rethink.

Chinese market under pressure

Figures from the China Passenger Car Association (CPCA) show that vehicle sales across the Chinese market fell 21.7% in the first nine months of 2026.

Chinese manufacturers have responded by increasing exports, expanding not only into Europe but also into emerging markets. According to the CPCA, exports surged 73.7% in September.

Volkswagen has also struggled in China. Its third-quarter vehicle sales plunged 38.5% to 405,800 units, with the decline accounting for more than 80% of the group's overall drop in sales.