Volkswagen Losing Share In Its Single Biggest Market, China

Volkswagen AG VWAGY VWAPY said that despite some sales gains in recent months, it expects its market share in China to be around 16% this year, down from 20% since 2019.
The German giant is also facing soaring energy costs, supply-chain issues, and delays in delivering in-house software resulting in a disrupted model-release schedule, reports the Wall Street Journal.
China has been Volkswagen's cash cow for years, making the market-share erosion a particular concern.
The country accounted for 37% of the company's new car sales last year and 15% of the pretax profit from its passenger-car business.
The company operates 40 manufacturing plants in China. The report noted VW was the biggest foreign investor in China last year, citing a study by Rhodium Group, a research institute.
VW's China problem comes from lost ground to Tesla Inc TSLA as many Chinese electric-vehicle consumers see Tesla's cars as more sophisticated and attractive than VW's.
Another challenger is Warren Buffett-backed BYD Co BYDDY, which has seen its share of the broader Chinese auto market more than double this year to 7.2%.
The report further added that Volkswagen has also struggled to win over younger Chinese consumers who are especially attracted to pure battery electric vehicles replete with gadgets—advanced voice-control systems, self-parking, and driver assistance technology.
Price Action: VWAGY shares closed at $18.67 on Wednesday.
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