Skoda, which sold over 300,000 vehicles annually, exited the Chinese market in the middle of this year, with after-sales service taken over by SAIC Volkswagen.

Skoda Auto. Xinhua News Agency photo

After nearly 20 years in China, the Czech car brand Skoda, which has sold over 300,000 units in China for three consecutive years, has finally reached a farewell moment.

On March 26, Volkswagen China officially confirmed that the Skoda brand would exit the Chinese market by mid-2026. This decision stems from the brand’s global strategic adjustment, with Skoda focusing on high-growth markets such as India and ASEAN in the future.

At the same time, it was learned that Skoda’s after-sales service will be taken over by SAIC Volkswagen, ensuring that consumers’ after-sales rights are protected.

Sales until mid-year, continued after-sales support

The rumors of withdrawal originated from Skoda’s official statement. On March 25, Skoda confirmed that it would cease car sales in the Chinese market by mid-2026, which attracted public attention.

Skoda’s connection with China began in 2007. At that time, this Czech car brand with a history of over 130 years entered the Chinese market through cooperation with Volkswagen and SAIC. Skoda became the third brand under the Volkswagen Group to be produced in China, following Volkswagen and Audi.

With the advantages of cost performance and German quality, Skoda quickly won the favor of Chinese consumers. “Those who understand Volkswagen buy Skoda” became a well-known advertising slogan during that golden era of joint venture cars.

From 2016 to 2018, Skoda experienced a peak period in China, with sales exceeding 300,000 units for three consecutive years, reaching a peak annual sales of 341,000 units in 2018, and China once became its largest single market globally.

However, with the strong rise of domestic brands and rapidly intensifying market competition, Skoda’s sales have plummeted in recent years. By 2025, Skoda’s annual sales in China had fallen to around 15,000 units.

On the 26th, Volkswagen China responded that Skoda Auto would indeed exit the Chinese market, and to ensure a smooth business transition, Skoda Auto’s sales in China would continue until mid-2026. In the future, Skoda Auto’s customers in China will still receive comprehensive warranty and after-sales service support.

In addition, Volkswagen China told reporters that Skoda’s after-sales service would be taken over by SAIC Volkswagen, so consumers need not worry.

Skoda Octavia Combi. Xinhua News Agency photo

The twilight of second-tier joint venture brands

Skoda’s departure is not an isolated case. Before this, joint venture brands such as Suzuki, Renault, Jeep, and Mitsubishi have successively reduced or exited their businesses in China. Their common feature is the slow transformation toward electrification and intelligence.

The wave of automobile electrification is unstoppable, but Skoda has almost completely missed out. Against the backdrop of new energy vehicles’ penetration in China surpassing 50%, Skoda has failed to introduce any new energy model to the Chinese market, still sticking to its fuel vehicle product lines like the Octavia, Superb, and Kodiaq. The generational lag in car machine systems and assisted driving features has further caused it to lose attractiveness among Chinese consumers.

Industry insiders say that with the strong rise of domestic brands in the fields of electrification and intelligence, the joint venture dividends that relied on brand halo and technological gaps to capture the market have basically been eliminated.

It is worth noting that Skoda’s performance in the global market sharply contrasts with its poor showing in the Chinese market. In 2025, Skoda’s global sales exceeded 1 million units, a year-on-year increase of 12.7%, with an operating profit of 2.5 billion euros and an operating return rate of 8.3%, surpassing Audi and Porsche to become one of the most profitable sub-brands of the Volkswagen Group.

In other words, the Skoda brand is not unpopular; it just can’t sell in China. Volkswagen China’s response also shows that after Skoda exits the Chinese market, it will shift its strategic focus to high-growth markets such as India and ASEAN. In the Indian market, Skoda’s sales are expected to grow from 32,800 units in 2024 to 73,800 units in 2025, with a year-on-year increase of nearly 100%.

Skoda’s departure serves as a warning to joint venture brands in China: In the world’s most competitive automotive market, only by truly keeping up with the industry’s development trends can one avoid becoming the next eliminated entity.

Volkswagen’s booth at the 2025 Shanghai Auto Show. Xinhua News Agency photo

Volkswagen’s strategy in China remains unchanged

Although the Skoda brand is about to stop sales in China, the Volkswagen Group has not halted its transformation efforts in China.

Volkswagen China stated that China has always been at the core of the Volkswagen Group’s global strategy. The Volkswagen Group has nearly 40 factories in China, serving over 50 million customers, and has established the largest R&D center outside Germany—Volkswagen (China) Technology Co., Ltd. (VCTC)—to continuously advance the development of intelligent connected vehicle technology. VCTC collaborates with the group’s software company CARIAD China, local technology partners, and joint ventures to create electrification platforms and software solutions tailored for the Chinese market, reducing product development cycles by 30% and optimizing costs by 40%.

At the same time, the Volkswagen Group is continuously enriching its product matrix to better meet Chinese customer needs by integrating global standards with local innovations.

In recent years, the Volkswagen Group has been implementing the “In China, For China” transformation strategy, which has now reached the stage of accelerating deliverables. By 2026, the Volkswagen Group plans to have over 20 new energy vehicles entering the Chinese market, with around 50 new energy products planned for launch by 2030.