The global automotive market is facing intensifying price competition, according to Volkswagen China CEO Ralf Brandstätter. In an interview with the Süddeutsche Zeitung, Brandstätter described a “heated” Chinese market, characterized by over 100 brands vying for market share, leading to considerable price pressure across the entire industry.
He noted that many Chinese manufacturers are prioritizing aggressive discounting over investments in sustainable growth and technological advancements. Volkswagen, he stated, made a deliberate decision to avoid participating in this price war. While acknowledging that periods of exceptionally high returns are unlikely to return, Brandstätter affirmed Volkswagen’s commitment to maintaining profitability within the strategically important Chinese market.
Concerning Europe’s reliance on Chinese battery cells, Brandstätter highlighted the need for urgent action. He advocated for a comprehensive industrial policy approach that incorporates securing raw material supply chains.
Brandstätter further suggested a reciprocal arrangement for Chinese manufacturers operating in Europe. To avoid tariffs and establish a stronger foothold, he argued, these companies should establish a significant portion of their European value chains, including battery cell production. He drew a parallel to Volkswagen’s own practices, stating that similar conditions are required for securing operational licenses when establishing factories in China. Simply assembling vehicles, he emphasized, is insufficient.