In 2025, Chinese carmakers like Leapmotor, AITO, XPeng, and Xiaomi are seeing explosive growth in sales. Meanwhile, multinational brands such as Mercedes-Benz, BMW, and Porsche are experiencing a decline in sales.

Mercedes-Benz and BMW have provided their initial demand forecasts in China for 2026, both falling short of 500,000 units, a figure that’s roughly equivalent to their sales levels in China back in 2016.

Ten years ago, Mercedes-Benz sold 470,000 vehicles in China, up 26.6% year-on-year; BMW sold 516,000 vehicles, up 11.3%—those were their glory days.

Ten years later, it seems the numbers have come full circle, but the market is no longer what it used to be.

Multinational carmakers are indeed losing market share, but the speed of decline varies. Based on the 2025 report card, there are already clear differences within this group. Some have managed to hold their ground or even achieve slight growth; some are stuck in the middle, barely hanging on; while the former luxury brand leaders are watching both their sales and brand influence decline.

What exactly is happening behind this growing divide?

Toyota and GM: Steady Growth

Among multinational carmakers, Toyota and General Motors maintained relatively stable sales in 2025.

Toyota sold over 1.78 million vehicles in China, a year-on-year increase of 0.23%. While the growth is modest, it’s significant—this marks Toyota’s first return to positive growth since a decline in 2022. SAIC-GM’s performance was even more pronounced, with annual sales reaching 535,000 vehicles, up 22.99% year-on-year, finally ending a seven-year streak of declines that began in 2018.

In the context of overall pressure on joint venture and luxury brands, their ability to remain stable is by no means a coincidence.

Toyota’s confidence largely comes from its hybrid foundation. Although the penetration rate of new energy vehicles continues to rise and charging infrastructure is rapidly expanding, many users still experience range anxiety. Toyota’s hybrid technology, honed over years of technical development and market validation, offers these users an anxiety-free solution—hybrid models combine the convenience of traditional fuel vehicles with significantly reduced fuel costs.

Data shows that FAW Toyota’s intelligent hybrid models sold over 380,000 units throughout the year, up 14% year-on-year. GAC Toyota’s intelligent hybrid models sold over 390,000 units, accounting for more than half of GAC Toyota’s total sales.

Li recently purchased a Corolla Cross Hybrid. He admitted, “I commute 80 kilometers every day, and charging isn’t convenient. Toyota’s hybrid lets me enjoy the smoothness and low fuel consumption of electric drive without any range anxiety—I can just refuel and go. For me, this is the most practical and reliable technology choice right now.”

But Toyota isn’t stopping there. In the first half of 2025, Toyota will give more decision-making power to its Chinese team, implementing the “ONE R&D System” and the “China Chief Engineer System,” allowing local teams to decide how to develop models specifically for the Chinese market. At the same time, it is collaborating with Chinese tech giants such as Huawei, Xiaomi, and Momenta.

The rebound of SAIC-GM, on the other hand, is more like a thorough self-adjustment. In the second half of 2024, SAIC-GM announced it would hand over product definition and business decision-making power to its Chinese team.

The results of this adjustment were immediate. Buick became the main driver of growth, with its GL8 family reaching annual sales of 112,000 units; the new electric sub-brand “Electra” launched its first model, the Electra E7, which made a splash in the market with over 6,000 units delivered in two months. Cadillac’s pure electric model, the Lyriq, saw its deliveries increase by 90% year-on-year.

American cars were once regarded as gas guzzlers with rough designs. But the new models are completely different—the refined interiors and smart features are on par with the latest EV startups. The 2.0T variable cylinder engine paired with a 48V mild hybrid system is very fuel-efficient. Most importantly, I can tell that the Buick Envision Plus has been optimized specifically for Chinese road conditions and family needs—the chassis absorbs bumps smoothly, and the in-car system is packed with local apps.”

The Cadillac Lyriq doesn’t just stack up screens; instead, it creates a sense of luxury and technology with its outstanding chassis feel, quiet cabin, and that stunning 9K curved display. The experience is truly unique, and I’ve heard the latest infotainment system was upgraded by a Chinese team, so the localization is getting better and better.” Several consumers who purchased SAIC-GM new energy models commented.

S.Korean Brands: Lukewarm Performance

Compared to the countertrend resilience of Toyota and GM, South Korean brands represented by Hyundai and Kia seem to have gradually slipped into a subtle ”in-between” state in the Chinese market over the past two years. Their market share has stagnated for a long time, their presence continues to fade, and they are increasingly becoming a niche choice among multinational automakers.

According to data from the China Passenger Car Association, the market share of Korean brands shrank from 3.8% in 2020 to just 0.9% in 2025. In stark contrast, despite facing similar pressures, Japanese and German brands have managed to maintain their market shares at around 12.2% and 15.4% respectively during the same period.

Take Beijing Hyundai as an example: its total sales in 2025 are projected to reach 210,000 units, a year-on-year increase of 14.8%. While this appears to signal a recovery, the reality is far less optimistic. Since its sales fell below one million units in 2017, Beijing Hyundai has been on a downward trajectory, with sales in 2024 dropping to just 154,000 units—a decline of over 30%. In the eyes of many consumers, Beijing Hyundai has long since fallen out of the mainstream brand competition.

Looking at specific models, the once-popular SUV ix35 used to sell over 10,000 units per month, but now its monthly sales have stagnated in the triple digits. The Elantra, currently the brand’s best-selling model, is being squeezed by the aggressive pricing of domestic new energy vehicles like the BYD Qin and Leapmotor B01, as well as price cuts from joint-venture gasoline models such as the Sylphy and Lavida. As a result, its market share continues to shrink, with only 63,000 units sold in 2025—a year-on-year decrease of 18.1%.

Kia, another Korean brand, has also failed to reverse its downward trend. In 2025, Kia’s sales in China are expected to reach about 254,000 units, a modest year-on-year increase of 2.3%, but still far below its 2016 peak of 650,000 units.

Why have these brands ended up in such a predicament? Through interactions with many consumers, we have gradually discovered that the lukewarm performance of Korean cars is the result of multiple factors working together.

The slow pace of electrification is a key obstacle for S. Korean brands. While multinational rivals such as Volkswagen and Toyota have already launched several electric models in the Chinese market, Kia—which has introduced multiple pure electric models in Europe and the US—only began rolling out EVs like the EV6 in China in 2023. Beijing Hyundai’s first mass-produced pure electric model based on the Hyundai E-GMP dedicated EV platform, the EO Yio, will not launch until October 2025.

This lag not only means missing out on early market dividends, but also reinforces the perception among consumers that these brands are slow to transform.

At the same time, the position of Korean brands in the minds of consumers has also shifted. In the fierce market competition, the original “high cost-performance” positioning advantage of Korean cars is weakening.

In the past, South Korean cars carved out their own market space by positioning themselves precisely between Japanese and German brands—offering more stylish designs and richer features than Japanese cars, and more affordable prices than German ones.

However, this market space is now being squeezed from both the top and bottom. At the top end, its brand premium has always struggled to compete head-to-head with mainstream German and Japanese brands. At the bottom end, Chinese brands are not only rapidly catching up in design and quality, but have also established clear advantages in electrification and smart technology, along with strong cost control capabilities.

"I've driven my Hyundai ix35 for six years without any major issues. It's been worry-free and the car itself is pretty good, but I wouldn't recommend it to my friends. After all, with the same budget nowadays, there are just too many choices. If my friends care about technology and running costs, domestic new energy vehicles have a clear edge. And if they insist on a joint venture brand, there are plenty of other options with a better reputation."

"Back then, I chose Hyundai because I liked the design, the discounts were attractive, and I could get the prestige of a joint venture car for less money. But now, compared to Chinese brands at the same price point, it feels like they belong to two different eras," many long-time followers of Korean cars admit.

BMW, Mercedes-Benz and Audi Back to a Decade Ago

Within the shifting market landscape, the most pronounced decline is seen among German brands such as BMW, Mercedes-Benz, Audi, Porsche, and Volkswagen, as well as Japanese brands like Nissan and Honda. Even Ford, representing American brands, has not been spared.

According to the data, Mercedes-Benz sold 470,000 vehicles in China in 2016, peaked at 774,000 units in 2020, and has been declining ever since. In 2025, sales are projected at only 575,000 units, a year-on-year drop of 19% or over 300,000 units in five years.

BMW’s sales were still at a high of 825,000 units in 2023, but are expected to fall to 625,500 in 2025, a year-on-year decrease of 12.5%. In just two years, BMW will have lost about 200,000 units of market share in China.

Audi’s decline has been more gradual but persistent: from 589,000 units in 2016, sales remained at 729,000 in 2023, but are expected to drop to 617,500 in 2025, a year-on-year decrease of 5%.

Volkswagen’s sales in 2025 are projected at 2.69 million units, down 8% year-on-year. Compared to its peak of 4.23 million units in 2019, the decline is significant.

“Not selling well” has become the norm for Porsche in the Chinese market. In 2025, Porsche’s deliveries in China dropped to 41,900 units, a 26% decrease from 56,900 units in 2024. This marks the fourth consecutive year of declining sales for Porsche China since 2022.

Japanese brands Honda and Nissan are facing similarly severe declines. In 2025, Honda and Nissan’s sales in China reached 645,300 and 653,000 units respectively, down 24.28% and 6.26% year-on-year, with Nissan’s sales in China falling for seven consecutive years.

Changan Ford’s sales have also continued to slide, with total retail sales in 2025 at just 99,400 units—nearly halved from 247,000 units in 2024. Compared to its 2016 peak of over 957,000 units, the contraction is nearly 90%.

Changes in market share are closely tied to shifts in consumer demand. Before 2020, brands like BBA, Nissan, and Honda were themselves key factors in purchase decisions, symbolizing quality assurance and status. However, as Chinese brands have rapidly advanced in technology and quality, consumer attitudes have fundamentally shifted. Buyers no longer simply chase brand prestige, but instead focus more on technological features and practicality.

A consumer surnamed Zhang bought a German luxury brand in 2020, but when he replaced his car last year, he decisively chose a high-end Chinese new energy vehicle. His reason was simple: the new model offered a smart cockpit and assisted driving features that better matched his current usage habits.

“In the past, buying a car was about looking at what people around you drove—having a good brand felt prestigious. But now, the mindset has changed. Experiences like smart cockpits and assisted driving are much more tangible than just a logo.”

This shift in mindset has directly exposed the core weakness of lagging multinational carmakers—their slow progress in electrification and smart technology. In China, where new energy vehicle penetration has surpassed 59%, these brands are clearly falling behind the pace of the market. Early “fuel-to-electric” models, with outdated technology and poor range, were seen as transitional products, severely damaging their initial reputation in the EV sector.

Even though these brands ramped up their new energy offerings in 2025, their market performance still fell far short of expectations.

Specifically, Audi’s first model built on the PPE pure electric platform, the E5 Sportback, showcased the capabilities of its 800V high-voltage platform and next-generation electronic architecture. However, after its launch, monthly sales have consistently failed to exceed 2,000 units—a figure that falls far short compared to domestically popular models in the same price range, which often deliver over 10,000 units per month.

The all-new Mercedes-Benz pure electric CLA set its starting price at 249,000 yuan, significantly lower than previous market expectations, in an attempt to attract buyers with a more affordable price. Nevertheless, the results were underwhelming, with total sales in the last two months of 2025 reaching only 1,241 units.

In response to this situation, multinational automakers are launching a full-scale counteroffensive. In 2026, BMW is expected to successively introduce several new “Neue Klasse” models, featuring intelligent driving and urban navigation in cooperation with Momenta. Mercedes-Benz plans to launch at least 18 new models, including the all-new pure electric AMG GLC, all equipped with its self-developed MB.OS architecture and supporting advanced L2++ level intelligent driving. Audi will continue to advance its joint development project with SAIC, introducing the second AUDI-branded model, the E7X, which will be positioned as an SUV.

However, in China’s fiercely competitive market, whether these measures will help them regain lost market share remains to be seen.