Volkswagen Is Losing Share in Its Biggest Market, China – Volkswagen (OTC: VWAGY)

  • Volkswagen AG VWAGY VWAPY said it expects its market share in China to be around 16% this year, down from 2019’s 20%, despite some sales gains in recent months.
  • As per a Wall Street Journal report, the Germany giant is facing rising energy costs, supply-chain issues and delays in delivering in-house software, which have resulted in disrupted model-release schedules.
  • China has been Volkswagen’s cash cow for years, making market share erosion a particular concern.
  • The country accounted for 37% of the company’s new car sales last year and 15% of pretax profit from its passenger-car business.
  • The company operates 40 manufacturing plants in China. Citing a study by Rhodium Group, a research institute, the report said VW was the largest foreign investor in China last year.
  • VW’s China problem comes from lost ground Tesla Inc TSLA Many Chinese electric-vehicle consumers see Tesla’s cars as more refined and attractive than VW’s.
  • Another Challenge Warren Buffett Backed BYD Co. ByddyWhich has seen its share of the wider Chinese auto market more than double this year to 7.2%.
  • The report further added that Volkswagen has also struggled to win over young Chinese consumers, who are particularly attracted to pure battery electric vehicles loaded with gadgets – advanced voice-control systems, self-parking and driverless assistive technology.
  • price actionShares of VWAGY closed at $18.67 on Wednesday.
  • photo via company

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