(Yicai) Nov. 6 -- Major multinational automakers, including Volkswagen Group, Ford Motor, and Stellantis, reported disappointing sales in China in the quarter ended September as the country’s rapidly growing electric vehicle market continues to favor local brands.

Volkswagen sold around 2.1 million cars in the major auto manufacturing nation during the first three quarters, marking a 10 percent year-on-year drop, according to its interim report. Globally, the German owner of brands Audi, Porsche, and Scania posted a net profit of EUR1.6 billion (USD1.7 billion) for the quarter, a 64 percent decline from a year earlier, while revenue fell 0.5 percent to EUR78.5 billion (USD84.2 billion).

Marco Schubert, a member of Volkswagen's extended executive committee, attributed the decline in global deliveries to fierce market competition. 

Foreign carmakers are losing market share in the world's biggest auto market. As China's combustion engine market shrinks, local automakers such as BYD, Geely Holding Group, and Li Auto have been capitalizing on the surge in EV demand, offering more affordable options compared to their global counterparts.

Even the luxury segment faced challenges. Porsche logged a 29 percent decrease in China sales, delivering just 43,000 cars in the first three quarters.

Other brands also reported double-digit declines. Ford sold 133,000 vehicles in China during the three months, a decrease of 11 percent. Stellantis, the parent company of brands like Chrysler, Alfa Romeo, and Citroen, saw its sales in China, India, and the Asia-Pacific region drop by 30 percent year-on-year, totaling just 14,000 units in the third quarter.

General Motors managed to boost its sales but failed to make a profit. The American company recorded a 14 percent increase in Chinese retail sales, marking its largest single-quarter growth in two years. However, GM still posted a loss exceeding USD100 million, contributing to a total loss of around USD347 million in China for the first nine months of the year.  

GM stated it would continue to focus on the EV sector and improve the profitability of its sport utility vehicle lineup in a bid to turn around its performance in China.

In response to falling sales, multinational carmakers have been restructuring their operations. Volkswagen’s joint venture with Shanghai-based SAIC Motor announced over a year ago the closure of its first factory. Stellantis has moved to a “light-asset model” by ending its JV with GAC Group and taking its Jeep brand operations independent. Ford, meanwhile, has been refocusing its efforts in China by exporting locally produced vehicles to markets in the Middle East, Southeast Asia, and the Americas, aiming to offset its sales losses in the domestic market.

Editors: Shi Yi, Emmi Laine