China: German brands sell almost as many cars as the country’s 25 local carmakers combined image

Volkswagen AG, Europe’s largest automaker and the second biggest in the world, owes much of its progress to just one country, albeit the world’s main auto market today – China.

The brands that form the Volkswagen Group, together with the ones inside the local joint ventures have held a decisive lead in the country’s compact sedan market throughout 2014, securing the reign as the largest automaker in China.

Four of VW’s cars have been the country’s best-selling compacts, allowing the German marquees’ share of the overall Chinese market to climb from 21% in 2013 to 24% in July. That means German brands are just 6% below the combined market share of all local Chinese automakers.

“European brands, especially Volkswagen, have been ferocious in winning market share,” said Yale Zhang, managing director of researcher Automotive Foresight. “Chinese brands’ biggest woe is losing ground in the compact segment because of the onslaught.”

“Most Chinese brands won’t survive,” thinks analyst Benjamin Lo at Nomura International.

According to researcher LMC Automotive, Volkswagen has sold so far in 2014 no less than 667,688 New Lavida, New Santana and Sagitar compact sedans – and that compares to just 147,651 units for the top three native brands: Geely’s Emgrand EC7, Great Wall’s Voleex C30 and BYD’s Surui.

Via Reuters