Volkswagen confirms Chinese-made cars for Australia

The boss of German automaker Volkswagen has confirmed it will sell Chinese-made models in Australia as it looks to rebound from sluggish global sales.

Speaking to British outlet Autocar at the Paris motor show last week, Volkswagen brand CEO Thomas Schäfer said the automaker was looking to export more Chinese-built vehicles to markets including Europe and Southeast Asia.

While Volkswagen Group CEO Oliver Blume previously said the brand is open to selling Chinese-made cars globally, Mr Schäfer specifically named Australia among the markets set to receive Chinese-made Volkswagens.

“We’re starting now to export to the global south and countries that have easier access from China than Europe, such as Australia and the Middle East,” Mr Schäfer said.

“For the future, we’re getting ready for bringing one or more vehicles in from China.”

The Volkswagen boss didn’t specify which models would be sold here, or whether they would come from the brand’s range developed specifically for the Chinese market.

Volkswagen produces vehicles in China through partnerships with SAIC, FAW and JAC. SAIC, which owns MG Motor, builds China-specific Volkswagens including the ID. Era 9X, a 5.2-metre-long, six-seat SUV with an extended-range electric (EREV) powertrain, unveiled in January.

Volkswagen Australia has yet to announce any Chinese-built models for its local lineup.

The German brand was the first official vehicle distributor to offer a Chinese-made passenger car here, introducing Polo Classic sedans built by Shanghai Volkswagen at Anting, near Shanghai, to Australian showrooms in 2004.

Volkswagen began negotiations on Chinese production in 1978, with its first locally assembled Santana rolling off the line in 1983. Its Volkswagen-brand manufacturing operations now span 13 vehicle assembly plants and 21 component plants in China.

The brand plans to introduce more than 30 new electrified models there by 2029, spanning battery-electric, plug-in hybrid and range-extender powertrains.

Models currently produced in China include local versions of the Golf, Passat, Tiguan and Tayron, alongside nameplates developed for China such as ID. Era, ID. Aura, Lavida, Lamando, Talagon and Tavendor.

The Volkswagen brand was the best-selling auto brand in China from 1986 until 2022, with BYD taking the top spot in 2023.

Mr Schäfer said Chinese-made models would likely supplement Volkswagen’s existing European lineup. Its European-market passenger cars are largely built in Germany, Spain, Portugal and Slovakia, although the petrol-powered Polo hatch comes from South Africa.

“You know, there are some exciting cars that we would not develop for Europe necessarily because they are technically too big, like bringing in the ID. Era [SUV]," said Mr Schäfer.

“But we might do some selected imports to see how it works. It's not to replace any of the existing vehicles.”

The comments come amid a sweeping Volkswagen Group restructuring, with planned job cuts totalling 100,000 and the end of vehicle production at multiple German sites as the company looks to halve its model lines.

Car production at Volkswagen’s Dresden factory ended in December 2025, with Osnabrück scheduled to follow in 2027.

The Group has also said it cannot currently secure competitive replacement production for four other German plants as their existing products finish between 2031 and 2034.

“The big thing about our strength in China is that we have done an exercise to bring down cost in in the vehicle – both material and engineering cost – over the last two years,” Mr Schäfer added.

“We’ve radically rethought the vehicles and worked with partners here [in Europe] and there [in China]. We’ve set up vehicles that are completely cost-competitive in the Chinese market.”

In Australia, Volkswagen’s annual sales have fallen from a peak of 60,225 in 2015 to 28,970 last year. Its 2025 result represented a 20.6 per cent year-on-year decline, following an 16.8 per cent drop in 2024.

Reflecting an ongoing trend, Chinese-made vehicles accounted for 38.9 per cent of Australian new-vehicle sales last month, outselling vehicles made in Japan and Thailand combined.

Chinese-built vehicles from brands originating outside China include the Tesla Model Y SUV, as well as models from Mazda, Cupra, Hyundai and Volvo. Ford will join them in November 2026 with the arrival of the Transit City electric one-tonne van.

Australia’s best-selling brand, Toyota, hasn't ruled out importing Chinese-made vehicles.

Toyota’s market share has fallen by approximately 3.4 percentage points to 16.0 per cent in the first nine months of 2026 compared with the same period last year, amid growing competition and pressure on prices and profit margins.

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