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Volkswagen is one of the world's four largest automobile manufacturers. Headquartered in Wolfsburg, Germany, it was founded by Ferdinand Porsche in 1937 and serves as the core brand of the Volkswagen Group. The name "Volkswagen" literally means "people's car" in German, a philosophy that has remained central to the brand's development since its inception.
In 2025, the Volkswagen Group delivered approximately 9 million vehicles worldwide (with some sources reporting a precise figure of 9.022 million units), remaining broadly in line with the previous year and retaining its position as the world's second-largest automaker by sales volume. The Group generated €321.9 billion in revenue and €8.9 billion in operating profit during the year. Automotive net cash flow reached €6.4 billion, up 24% year-on-year, while net liquidity remained at a solid €34.5 billion.
In China, Volkswagen delivered 2.7 million vehicles in 2025, ranking first among foreign automakers. Deliveries of internal combustion engine vehicles exceeded 2.57 million units, accounting for more than 22% of China's passenger vehicle market powered by conventional engines. The Group's automotive brands include Volkswagen Passenger Cars, Audi, Porsche, Škoda, SEAT/Cupra, Bentley, Lamborghini, Bugatti, and Ducati, forming one of the largest automotive brand portfolios in the world.
Volkswagen's origins can be traced to a simple vision: enabling ordinary families to own a car. In 1934, Ferdinand Porsche was commissioned to develop a "people's car," resulting in the KdF-Wagen, the prototype of the model that would later become world-famous as the Beetle.
Volkswagen was officially established in Berlin in 1937, and construction of the Wolfsburg factory began the following year. However, the outbreak of World War II disrupted plans for civilian automobile production. The factory was redirected toward military manufacturing and later faced the challenges of British military administration and postwar reconstruction.
In 1949, large-scale production of the rear-engined, air-cooled Beetle commenced. Thanks to its simplicity, durability, and affordability, the Beetle became a global success. Total production reached 20 million units, surpassing the Ford Model T to become the highest-volume single vehicle model in automotive history.
In 1974, the first-generation Golf, designed by Italian automotive designer Giorgetto Giugiaro, made its debut. Featuring a front-engine, front-wheel-drive layout and a water-cooled engine, the hatchback quickly succeeded the Beetle as Volkswagen's new people's car. More than 500,000 units were sold in its first year alone, and cumulative production eventually exceeded ten million units.
Through models such as the Passat, Jetta, and Santana, Volkswagen established itself as Europe's largest automobile manufacturer. Beginning in the 1990s, the company aggressively pursued platform-sharing strategies. The introduction of the PQ platform family and the MQB modular transverse architecture enabled multiple brands within the Group to share key components, significantly reducing development and manufacturing costs.
Volkswagen's relationship with China began in 1978. In 1983, the first Chinese-built Santana rolled off the production line in Shanghai. In 1985, Shanghai Volkswagen Automotive Co., Ltd. was established as the first passenger-car joint venture in modern China. The subsequent establishment of FAW-Volkswagen further expanded Volkswagen's presence in the Chinese market. Over the following decades, models such as the Santana, Jetta, Lavida, Sagitar, Passat, and Tiguan became deeply embedded in the automotive memories of Chinese consumers.
In 2015, Volkswagen faced the global "Dieselgate" emissions scandal, in which certain diesel vehicles were equipped with software capable of manipulating emissions testing. The crisis resulted in large-scale recalls and substantial financial penalties, but it also accelerated the company's transition toward electrification.
In recent years, Volkswagen has actively embraced the global shift toward electrification and intelligent mobility. The launch of the all-electric ID. family marked the beginning of the company's transformation from a traditional automaker into a technology-driven mobility enterprise.
Volkswagen's product portfolio spans the full spectrum from conventional internal combustion vehicles to new-energy vehicles. The Group operates across passenger cars, light commercial vehicles, and multiple other segments while leveraging joint ventures to build localized product portfolios in key markets.
In the conventional vehicle segment, Volkswagen continues to rely on a strong product lineup that supports its extensive market base. In the compact sedan category, the Lavida and Sagitar consistently rank among the segment leaders. In the midsize sedan segment, the Passat remains a dominant player. The SUV lineup includes core models such as the Tiguan, Tayron, and Teramont, covering categories ranging from compact to full-size SUVs.
In 2025, Audi reclaimed the title of China's best-selling luxury internal combustion engine brand for the first time in six years, while the Audi A6L remained the best-selling premium executive sedan powered by a conventional engine.
In the new-energy vehicle segment, the ID. family, based on Volkswagen's MEB modular electric-drive platform, serves as the core product line. Models including the ID.3, ID.4, ID.6, and ID.7 cover segments ranging from compact cars and compact SUVs to large SUVs.
In 2025, SAIC Volkswagen's ID. family recorded annual sales exceeding 143,000 units, up 12% year-on-year, with the cumulative user base surpassing 200,000. In the premium electric segment, models based on the PPE platform, such as the Audi Q6L e-tron, further expand Volkswagen's electrified portfolio.
According to its plans, Volkswagen intends to introduce approximately 50 new-energy vehicle models in China by 2030, including around 30 fully electric vehicles.
Within its Chinese joint-venture network, Volkswagen operates two major partnerships. SAIC Volkswagen manages both the Volkswagen brand and SAIC Audi, achieving terminal sales of 1.06 million vehicles in 2025. FAW-Volkswagen delivered nearly 1.6 million vehicles during the year, maintaining its position as the best-selling automotive joint venture in China. Volkswagen Anhui (the "Golden Badge Volkswagen" brand) focuses on the new-energy vehicle sector and serves as a cornerstone of Volkswagen's localized EV research, development, and manufacturing strategy in China.
For Volkswagen, 2025 was a challenging transitional year characterized by significant regional divergence across global markets.
Its European home market grew by approximately 5%, with the share of battery-electric vehicles rising substantially to 19.1%. Orders for battery-electric vehicles increased by 55% year-on-year and accounted for 22% of the order backlog.
South America grew by approximately 10%, increasingly emerging as one of Volkswagen's most promising markets. Sales in the Middle East and Africa also increased by around 10% year-on-year.
In contrast, the North American market declined by approximately 10% due to tariff-related pressures, while the Chinese market contracted by roughly 8%, creating dual challenges for the Group's overall performance.
Financially, Volkswagen's revenue remained largely unchanged in 2025, while operating profit fell to €8.9 billion, a decline of 53% compared with 2024. The operating margin stood at 2.8%.
The sharp decline was primarily attributable to €5.9 billion in special items, including Porsche goodwill impairments, product strategy adjustment costs, and restructuring expenses, as well as additional costs resulting from U.S. tariffs. Excluding these non-recurring factors, Group operating profit would have reached €14.8 billion, corresponding to a margin of 4.6%, demonstrating the resilience of its core business operations.
In China, Volkswagen delivered 2.69 million vehicles during the year, maintaining its position as the leading foreign automaker. The conventional vehicle business remained strong, securing more than 22% market share. Deliveries of battery-electric vehicles reached 983,100 units, up 32% year-on-year, with the share of EVs rising to 10.9% of total deliveries.
Notably, Volkswagen's equity-accounted operating profit from China declined sharply to €958 million, down 45% from €1.7 billion in 2024, reflecting the increasingly competitive landscape of the Chinese market.
Volkswagen's technology roadmap in electrification and intelligent mobility forms the foundation of its transformation strategy.
The Group's current primary EV architecture is the MEB modular electric-drive platform. MEB supports a broad range of new-energy vehicles, from compact models to larger vehicles, and is undergoing accelerated localization in China.
By the end of 2025, upgraded MEB models had become the first to adopt the China-developed CEA electronic and electrical architecture while also introducing more cost-competitive lithium iron phosphate (LFP) batteries.
Volkswagen's platform evolution roadmap is becoming increasingly clear. Beginning in 2026, all-electric models will gradually migrate to the upgraded MEB Plus platform, featuring universal adoption of LFP batteries and cell-to-pack (CTP) technology to reduce manufacturing complexity and cost.
For the mid- to high-end market, the SSP (Scalable Systems Platform) architecture has been finalized. SSP will support both 800V battery systems and two powertrain configurations: pure battery electric and range-extended electric.
In China, the CMP compact platform targeting the mass market will debut in 2026, followed by the CSP (China Scalable Platform) for the mid- and high-end segments in 2027.
Volkswagen has established deep cooperation with Gotion High-Tech. By the end of 2025, the Unified Cell standardized battery cell had entered large-scale mass production and delivery.
The Unified Cell adopts a standardized dimensional design compatible with multiple battery chemistries, including lithium iron phosphate and ternary lithium technologies. It is fully compatible with MEB and next-generation EV platforms and can reduce overall battery costs by up to 50%.
Volkswagen also maintains strategic partnerships with CATL and LG Energy Solution, creating a dual-track battery supply system that combines in-house production capabilities with external procurement.
CEA (China Electronic Architecture) is Volkswagen's first electronic and electrical architecture specifically developed for China based on zonal control and centralized computing.
The initial development was jointly completed by Volkswagen and XPeng, involving more than ten million lines of software code. The CARIAD China team is continuing independent development and iterative upgrades based on this foundation.
Supported by the CEA architecture, Volkswagen has reduced next-generation EV development costs by 40% while shortening product development cycles by 30%.
Beginning in the second half of 2026, all new models based on the CEA architecture will feature onboard AI agents integrating large-language-model technologies from Chinese technology companies including Tencent, Alibaba, and Baidu, enabling natural-language interaction within intelligent cockpit systems.
Volkswagen has also established CARIZON in partnership with Horizon Robotics to develop advanced driver-assistance systems in-house. Range-extended electric vehicles will be introduced in the second quarter of 2026 to better address the preferences of Chinese consumers.
In response to rising trade barriers and increasing regional fragmentation, Volkswagen has adopted a global strategy emphasizing regional independence and diversified deployment.
Europe remains the Group's strategic home base. In 2025, the European market continued to grow steadily, with battery-electric vehicles accounting for 19.1% of sales and maintaining Volkswagen's leading market position. By 2027, Volkswagen plans to launch nine battery-electric models in Europe while continuing cost-efficiency initiatives at production facilities in Poland, the Czech Republic, Spain, and other locations.
China occupies a unique position within Volkswagen's global strategy as both an innovation hub and a source of technological development. Volkswagen has invested €3.5 billion in building its Hefei Innovation Center, establishing a genuinely localized research and development system and transitioning from a "global introduction plus adaptation" model to a "China-native" development approach.
This transformation has significantly accelerated development efficiency. New vehicle development cycles have been reduced from the traditional four years to 24–30 months. More importantly, lessons learned in China have been applied to Volkswagen's European operations, shortening development cycles there from 48 months to 30–36 months.
In terms of production capacity, Volkswagen's medium-term objective is to increase Chinese production from 3 million units in 2024 back to 4 million units, the level achieved in 2019. Future incremental capacity will primarily target export markets such as ASEAN countries and the Middle East.
By 2029, Volkswagen plans to launch more than 30 all-new new-energy vehicles in China.
South America has become one of Volkswagen's fastest-growing regions, recording growth of approximately 12% in 2025. By 2028, Volkswagen plans to introduce 11 all-new models in the region with the goal of becoming the leading brand in Brazil.
The emerging-market "reverse export" strategy has become a new chapter in Volkswagen's global expansion. Beginning in 2025, the first Volkswagen vehicles manufactured in China were successfully exported to the Middle East, with future plans to expand into Southeast Asia, Central Asia, Africa, and Latin America.
CEO Oliver Blume stated that, given China's cost advantages and technological strengths, Volkswagen intends to leverage China as a base for delivering products and services across Southern Hemisphere markets.
In its 2025 annual report, Volkswagen outlined its key objectives for 2026: revenue growth of 0%–3% and recovery of the operating margin to a range of 4.0%–5.5%.
China will see Volkswagen's largest-ever product offensive, with plans to launch more than 20 electrified models. These vehicles will feature enhanced Level 2 driver-assistance capabilities tailored to Chinese consumer preferences. Range-extended electric vehicles are scheduled to arrive in the second quarter of 2026, creating a comprehensive new-energy portfolio spanning battery-electric, plug-in hybrid, and range-extended technologies.
From a longer-term strategic perspective, Volkswagen has designated 2026 as its "year of delivery," shifting its focus from strategic planning to execution.
By 2027, Volkswagen plans to offer 30 electrified models in China, increasing to 50 by 2030, including approximately 30 battery-electric vehicles. Continued advancements in batteries, software, and autonomous driving technologies are expected to support the company's ambitions.
According to Oliver Blume, Volkswagen is pursuing its vision of becoming a "global leader in automotive technology." In the view of the Group's management team, the profitability generated by its conventional vehicle business continues to provide the financial foundation and investment capacity necessary to accelerate its pursuit of leadership in the intelligent electric vehicle era.
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