'Chinese Electric Vehicle Performance Has Changed'... Volkswagen, 15-Year Consecutive Leader, Also Overtaken

BYD Surpasses Volkswagen to Become No.1 in Chinese Market

German automaker Volkswagen has relinquished its 15-year reign as the automotive king in the Chinese market to Chinese company BYD.

According to Bloomberg industry data on the 25th (local time), BYD sold approximately 440,000 vehicles in the Chinese market in the first quarter of this year, securing the top spot in sales within China. During the same period, Volkswagen's sales in China amounted to about 420,000 vehicles, placing it second. Since 2008, Volkswagen had consistently held the number one sales position in the Chinese automotive market, but now it has ceded the throne to a Chinese company.

In terms of market share as of the end of the first quarter, BYD narrowly surpassed Volkswagen with 10.4% compared to Volkswagen's 10.1%. Japanese automaker Toyota took third place with 7.8%, while Honda and Chinese automaker Changan each held 5.1%, tying for fourth place.

BYD’s success this time comes from its production of only pure electric and hybrid vehicles. In contrast, electric vehicles accounted for only 6% of Volkswagen’s sales in the first quarter. Bloomberg analyzed that this trend is due to Chinese electric vehicles, once perceived as inexpensive cars, improving their performance and expanding their market dominance as cost-effective vehicles, which has led to a decline in the influence of global automakers.

[Image source=Reuters Yonhap News]

BYD is also aggressively expanding overseas. In addition to its eight factories in China, it has established plants in emerging markets such as India, Thailand, and Brazil, and is considering building new factories in Europe. Europe is expected to see a rapid increase in electric vehicle demand starting in 2025, when environmental regulations will be tightened, prompting BYD to accelerate the establishment of factories within Europe to secure market leadership. This is based on the judgment that securing volume in the market is crucial amid intensifying price competition in the electric vehicle sector.

BYD’s sales growth is steep. Bloomberg reported that BYD sold a total of 550,000 vehicles globally in the first quarter, which exceeds the total annual vehicle registrations in the UK last year.

Seemingly aware of this sense of crisis, Volkswagen CEO Oliver Blume said at the Shanghai Auto Show earlier this month, "BYD is a very strong competitor," but added, "Market volume is not everything. It is more important for us to conduct successful business here in China and become the best company."

Volkswagen plans to launch the pure electric sedan 'ID.7 Vision' targeted at the Chinese market this year. The China-spec model will be produced at local factories. Jochen Siebert of JSC Automotive, an automotive industry consulting firm headquartered in Shanghai, said, "Volkswagen needs to produce electric vehicle models as popular as its internal combustion engine cars and transition its business in China to electric vehicles to remain competitive."

According to the China Association of Automobile Manufacturers, electric vehicle sales in China, the world's largest electric vehicle market, are expected to exceed 9 million units this year, growing more than 30% compared to 6.89 million units last year.

This content was produced with the assistance of AI translation services.