VW pulls Skoda brand from China after years of falling sales
A Skoda Peaq electric car is seen during the opening of a new battery assembly hall at the Skoda factory in Mlada Boleslav in the Czech Republic on February 27, 2026.
Photo: AFP Volkswagen will withdraw its mass-market car brand Skoda from mainland China after years of lacklustre sales, as international marques continue to lose their appeal in the world’s largest automotive market. “Skoda Auto has realigned its global strategy to focus on growth markets such as India and the Asean region,” a Volkswagen spokesperson said on Thursday in a written response to the South China Morning Post, without denying earlier reports that the Czech brand would cease selling new vehicles by mid 2026.
China would remain “at the very core of Volkswagen Group’s strategy” the spokesperson said, adding that the company would continue to expand its portfolio in China with innovative products tailored to local needs.
The decision followed the exit of Japan’s Mitsubishi Motors, which announced in July that it was terminating its involvement in a joint venture in Shenyang, capital of northeast China’s Liaoning province, ending its operations in the country after more than 40 years.
Established in 1896, Skoda entered the Chinese market in 2005 through a partnership with SAIC Volkswagen.
Following the 2007 launch of its first locally produced model, the Octavia, the brand leveraged Volkswagen’s technical platforms to position itself as an “affordable German-engineered” alternative.
By 2018, the brand reached its peak in China with about 341,000 deliveries, making China its largest market.
At that time, it maintained a network of more than 500 dealers selling cars including the Octavia, Superb and Kodiaq.
Despite aggressive price cuts, the brand sold 15,241 vehicles in China last year, according to company data, a 95 per cent plunge from its height and far short of its previous strategic goal of 500,000 annual deliveries.
The market’s total sales topped 30 million units in 2025.
Skoda’s underperformance in China coincided with the rise of home-grown carmakers, led by BYD and Geely.
Thanks to incentives for both manufacturers and buyers of electric vehicles (EVs), the domestic players seized market share building up technology and cost advantages.
The competition intensified into a price war in 2023, forcing even luxury petrol car makers like Audi to slash prices.
EVs accounted for 54 per cent of all new car sales last year.
Globally, Skoda’s deliveries grew 6.3 per cent t
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