“The mid-2010s were a golden age for Western carmakers in China, the world's biggest auto market. Brands like Buick and Volkswagen thrived as a newly empowered class of buyers couldn't get into foreign cars fast enough.
Now that footprint is slipping away.
The biggest Western automaker in China, Volkswagen, saw the market share for its brands fall to 9.7% in 2025 from 14.7% in 2015, according to data from industry consulting firm AlixPartners. The German carmaker is now eyeing tens of thousands of job cuts globally, in part because of lost ground in China.
Volkswagen went from $5 billion in profit from its Chinese operations to a projected $228 million to $684 million this year.
Today, Western car companies face intense competition from the local companies they once taught how to make cars.
American brands' total market share fell to 5% last year from 12% in 2014, according to AlixPartners.
Chinese cars that offer more features, better technology, and more competitive pricing make up two-thirds of new-car sales in the country and have almost entirely elbowed foreign manufacturers out of the electric and plug-in hybrid market.
Even Tesla, which helped spark China's EV boom, has seen its market share decline there.
Chinese brands got a head start on EVs in part thanks to government subsidies, but they increased their competitive advantage by acting fast, said Stephen Dyer, Asia-Pacific leader of AlixPartners' automotive and industrial practice.
He said China's automakers move much more quickly than their Western counterparts, eschewing long development cycles and instead pushing software fixes and upgrades later. Companies like XPeng, Li Auto and BYD replace most of their models every three years, whereas companies like Ford Motor typically have a five-year model replacement cycle.
"Ironically, the things that have led to the success of these legacy automakers now are actually an obstacle for their improvement," Dyer said.
Foreign brands still make up roughly half of internal combustion engine car sales, but the market is shrinking as Chinese consumers shift to EVs.
The dominance of Chinese brands remains true even as their home market shrinks amid an economic slowdown. In response, those automakers are going global, focusing on exports.
AlixPartners predicts that Chinese-brand cars will reach 16% of sales in Europe by 2030, up from 10% last year.
For now, steep tariffs and national-security concerns keep Chinese cars out of the U.S.
But to compete with them anywhere, Dyer said Western brands will have to see that their backs are against a wall.
"It's very doable, but it's not easy -- you really have to have the will to do it," he said.” [1]
1. Western Automakers Lose Their Grip on China. Davis, Ellie; Mollica, Andrew. Wall Street Journal, Eastern edition; New York, N.Y.. 01 July 2026: B1.
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