VW wary of Chinese car threat that’s only going to grow

Volkswagen is preparing for Chinese brands to increase their level of threat to traditional manufacturers in Europe, despite claiming minimal impact so far from the influx of newcomers.

“It's been abundantly clear for a while now that the Chinese manufacturers have identified Europe as a market for their products, they're hardly making any money anymore in China because of the fierce competition there and the pricing pressure,” Volkswagen Group chief executive Oliver Blume told the brand’s annual results media conference this week.

“In Europe, they can make good money with their vehicles, and the Chinese currently cannot export their products to the United States, so in that sense, that's their main focus.”

Blume said Volkswagen's strong brand position across the various manufacturers within the VW Group puts it in a good place against new entrants, but while the impact to date has been low, with no “noticeable adverse effect” so far, he’s aware that the situation is likely to change. 

“European customers appreciate our brands, not only the brands, but the design, the quality of our service offerings that we have been building here for many years, but we have to be prepared for pricing pressure on us as well,” he declared. VW has been working on bringing down production costs across its brands, in order to negate the price pressure inflicted by Chinese manufacturers. 

The German giant delivered more than 8.8m cars in 2025, a 1.0 per cent drop on the previous year, and with five of Europe’s biggest-selling electric cars, Blume declared the brand to be the “clear leader” in EVs. VW Group’s electric car sales were up 66 per cent in Europe last year, while in the US they were down 10 per cent and in China down 8 per cent, which the group’s chief executive said was “in line with expectations”. EV sales in South America, Asia (excluding China), and Africa and the Middle East were all up between 9 and 12 per cent year-on-year. Blume also said the direct and indirect cost of tariffs to the group hit five billion euros last year. 

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