Volkswagen Group is preparing for increased headwinds within the Chinese market. Ralf Brandstätter, the group’s executive responsible for Chinese business, issued a warning that the world’s largest automotive market might face its first shrinkage in nearly a decade. He indicated that, at best, the market could plateau at 24 million vehicles, citing reduced government subsidies for electric cars as a key contributing factor.
Brandstätter also revised the sales growth outlook, predicting that overall market sales will reach 26 million vehicles by 2030, a decrease from the previously forecast 28 million. This situation is intensifying competition across the board. To counter this pressure and defend its standing as a leading international manufacturer in China, Volkswagen plans to roll out new models. However, he acknowledged that the era of the substantial profits seen in previous years is over due to the sheer magnitude of competition within the Chinese market.
Furthermore, Brandstätter noted that China’s high technological ambitions are clearly reflected in its current five-year governmental plan. He pointed out that Beijing intends to boost its research and development expenditure by seven percent annually. He emphasized that these vast investments are heavily directed toward artificial intelligence, quantum computing, and robotics, areas where China is determined to take a leadership role. He concluded by advising that Germany, in turn, must similarly strengthen its own focus on technology, arguing that this focus is crucial not only for economic strength but also for national confidence.
