Volkswagen, BMW, Mercedes-Benz now seen as ‘brands for the parents’ by Chinese buyers

Cars from German auto brands are being shunned by many young Chinese buyers, who increasingly view them as being for older people, with newer domestic brands holding stronger aspirational appeal.

A report by Reuters highlights the declining sales of German brands in the world’s biggest auto market last year, despite the fact Volkswagen had long been China’s largest automaker there until it was overtaken by BYD in 2024 and pushed into third place by Geely in 2025.

“Maybe some younger customers perceive us as the brand for the parents,” the Volkswagen brand’s China CEO Robert Cisek told Reuters.

“The good thing is, of course, there is this credibility when it comes to Volkswagen’s safety, reliability and quality. At the same time, it’s also a little bit of a burden.”

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While Chinese brands were shunned by younger buyers only five years ago, domestic marques have since captured the imagination – and spending power – of a new generation.

The rapid pace of development across China’s automotive industry, combined with unmatched production capability, has seen European brands lose some of their cachet.

S&P Global Mobility data shows sales of German brands in China have fallen 25 per cent since 2020, to 3.9 million vehicles in 2025, as the market becomes increasingly competitive.

Their market share has dropped from 26 per cent in 2019 to 16 per cent in 2025, and the downward trend is expected to continue this year.

“They didn’t see this big change coming, and they didn’t see the speed at which it came,” automotive consultant Felipe Munoz told Reuters.

Their decline in China comes as German brands also face challenges at home, with Volkswagen, Audi, Porsche and Mercedes-Benz all revising their previous electric vehicle (EV) strategies.

Volkswagen has closed several factories, including its Dresden plant – the first factory closure in Germany in the company’s history – as well as its Brussels, Belgium facility where the Audi Q8 e-tron was built.

Last month, Volkswagen announced plans to cut global production by a further one million units, to around nine million.

Globally, Porsche sales fell 10 per cent in 2025, marking a notable reversal after the brand recorded an all-time sales record in 2022. It has also enjoyed some of the industry’s highest profit margins per vehicle over the past decade.

Audi, meanwhile, has launched a new China-specific brand – ‘AUDI’ in capital letters, without the four-ring logo – aimed at attracting younger buyers, with range-extender models that could eventually be offered in other markets.

Audi’s sales in China – its largest market – fell five per cent last year, and the AUDI brand was only launched in September.

BMW also recorded a 12.5 per cent drop in sales in China last year, but chief financial officer Walter Mertl told the South China Morning Post in March the brand expects to recover with new models.

The shift in the Middle Kingdom’s auto market comes as Chinese automakers expand into Europe, with brands including BYD and Geely establishing local manufacturing bases to avoid European Union tariffs.

Having eroded the dominance of German brands in China, domestic marques are now setting their sights on taking on some of the world’s most established brands in Germany itself. MORE: Peugeot to build cars in China for export markets potentially including Australia