Volkswagen has reclaimed the top spot in China’s auto market during the first two months of 2026, overtaking domestic EV leader BYD as government subsidies fade.
China remains the world’s largest car market, and the shift highlights changing competitive dynamics as global automakers regain ground against local electric vehicle champions.
Volkswagen’s joint ventures with FAW and SAIC secured a combined 13.9% passenger vehicle market share, according to China Passenger Car Association data.
Geely followed closely with 13.8% market share, while Toyota’s partnerships with GAC and FAW captured a combined 7.8% of total passenger vehicle sales.
The EV giant also recorded its largest sales decline since the pandemic, reflecting softer demand and the gradual removal of government incentives for electric vehicles.
Last week, BYD unveiled its first major battery upgrade in six years, aiming to strengthen competitiveness in a market shifting from aggressive price wars toward value-driven demand.
Volkswagen also announced mass production of its first vehicle co-developed with Chinese partner Xpeng, part of a plan to launch more than 20 new EV models in China this year.
