A number of underperforming international car brands are likely to either exit the 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 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. “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.” Last month, Volkswagen said it planned to close down Skoda’s operations in China after sales plunged 95% between 2019 and 2025. The Czech brand sold 15,241 units last year, or 1,270 units a month.
Stephen Dyer, Greater China Co-leader at AlixPartners, said last year that car brands selling fewer than 1,000 units a month were likely to be edged out soon. Currently, at least four international brands – DS, Jeep, Infiniti and Peugeot – sell about 1,000 units a month, according to the companies’ data. Others, such as Chevrolet and Kia, are also stuck in a downward spiral in a market where electric vehicles (EVs) are outselling conventional petrol-powered cars. Foreign brands have been eclipsed by their Chinese rivals because of their slow transition to electric cars. In China, EVs accounted for 54% of total new car sales in 2025, according to the China Passenger Car Association (CPCA). International carmakers held a 34.7% share of the market, compared with 52.7% in 2022. German carmakers including Volkswagen and BMW accounted for 15.4% of China’s passenger car market last year, compared with 21% in 2022. U.S. carmakers commanded a 5.5% share last year, compared with 8.5% three years earlier. Japanese carmakers from Toyota to Honda saw their market share slump to 12.2% last year from 20% in 2022. In 2025, Tesla was the only international brand that made it onto the list of the top 10 EV builders in China.
“Foreign brands are no longer our first choice because they are now the laggards in developing electric cars, particularly smart electric cars,” said Lin Junxin, a 55-year-old consumer who plans to replace his Buick Regal sedan with an Onvo L60 smart EV from Shanghai-based Nio. “Onvo is a spacious SUV with many intelligent features. More importantly, an electric car will save me hundreds of yuan in fuel costs every month,” Lin said. At the end of 2024, UBS said foreign carmakers were at risk of losing up to USD20 billion in profit annually in China amid a rapid market shift towards electric cars and smart vehicles, the South China Morning Post reports.
Several major Chinese automakers have released their March sales results, delivering record-high exports. BYD exported 119,591 passenger cars and pickups in March, up 65.2% year‑on‑year. Chery Group exported nearly 150,000 vehicles in March, the 11th consecutive month of exports exceeding 100,000 units. New-energy vehicles (NEVs) have become the key driver of Chery's expansion into Europe's high-end market. Chery has a presence in 18 European countries. Of every five Chery NEVs that are exported, one is destined for Europe. Geely Auto, Changan Automobile, Guangzhou Automobile Group Co (GAC) and other prominent domestic brands also set export records in March, reflecting a broad‑based increase in China's auto exports.
