Media365
A number of underperforming international car brands are likely to either exit the mainland Chinese market or scale down operations, as losses mount due to falling sales and shrinking market share.
Carmakers delivering fewer than 1,000 units a month already faced a do-or-die situation in the world’s largest automotive market because the weak sales were not enough to cover their manufacturing and operating costs, according to analysts.
Some carmakers are likely to follow Skoda, Volkswagen’s mass-market brand, which shut down its Chinese operations this year, as cutthroat competition along with a contracting market ratchets up pressure on unprofitable marques.
“Skoda will not be the last foreign auto brand to withdraw from China in 2026,” said Chen Jinzhu, CEO of consultancy Shanghai Mingliang Auto Service. “Keen competition in this market will result in further consolidation of the automotive industry in the coming three to five years.”
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Last month, Volkswagen said it planned to close down Skoda’s operations in China after sales plunged 95 per cent between 2019 and 2025. The Czech brand sold 15,241 units last year, or 1,270 units a month.
