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 automotive brand Skoda, which once sold over 300,000 vehicles in China for three consecutive years, has ultimately reached its farewell moment.

On March 26, Volkswagen China officially confirmed that its Skoda brand will exit the Chinese market by mid-2026. This decision is part of 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 has been reported that Skoda’s after-sales service will be taken over by SAIC Volkswagen, ensuring that consumer after-sales rights are protected.

Sales will continue until mid-year, with ongoing after-sales support.

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

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

With the advantages of cost-effectiveness and German quality, Skoda quickly gained favor among Chinese consumers. “Those who understand Volkswagen buy Skoda,” became a well-known slogan during the golden era of joint venture vehicles.

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

However, with the strong rise of Chinese 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 would indeed exit the Chinese market, and to ensure a smooth business transition, Skoda’s sales in China would continue until mid-2026. In the future, Skoda customers in China will continue to receive comprehensive warranty and after-sales service support.

Additionally, Volkswagen China stated to reporters that Skoda’s after-sales service will 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. Prior to this, joint venture brands such as Suzuki, Renault, Jeep, and Mitsubishi have all reduced or exited their Chinese operations. Their common characteristic is a slow transition towards electrification and intelligence.

The wave of automobile electrification is unstoppable, but Skoda has almost completely missed it. Against the backdrop of new energy vehicles surpassing a 50% penetration rate in China, Skoda has failed to introduce any new energy models to the Chinese market, still relying on gasoline vehicle product lines like Octavia, Superb, and Kodiaq. Moreover, the generational lag in its in-car systems and assisted driving functions has further diminished its appeal to Chinese consumers.

Market insiders indicate that with the strong rise of Chinese domestic brands in the fields of electrification and intelligence, the joint venture advantages that once relied on brand halo and technological disparities have essentially been wiped out.

It is worth noting that Skoda’s performance in global markets sharply contrasts with its dismal results in China. In 2025, Skoda’s global sales surpassed 1 million units, with a year-on-year growth of 12.7%, operating profit reaching 2.5 billion euros, and an operating return rate as high as 8.3%, surpassing Audi and Porsche, making it one of the most profitable sub-brands of the Volkswagen Group.

In other words, the Skoda brand is not unpopular; it simply cannot sell in China. This can also be seen in Volkswagen China’s response, which indicates that after exiting the Chinese market, Skoda will shift its strategic focus to high-growth markets such as India and ASEAN. In the Indian market, Skoda’s sales are projected to grow from 32,800 units in 2024 to 73,800 units in 2025, reflecting an almost 100% year-on-year increase.

Skoda’s departure has sounded an alarm for joint venture brands in China: In the world’s most fiercely competitive automotive market, only by genuinely keeping up with the major trends in the automotive industry can one avoid becoming the next eliminated player.

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 set to stop sales in China, the Volkswagen Group has not halted its transformation in China.

Volkswagen China stated that China has always been 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 research and development center outside Germany—Volkswagen (China) Technology Co., Ltd. (VCTC)—to continuously promote 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, while shortening product development cycles by 30% and optimizing costs by 40%.

At the same time, the Volkswagen Group is continually 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 a “In China, for China” transformation strategy, which is now at the stage of accelerating delivery of results. By 2026, the Volkswagen Group will introduce over 20 new energy vehicles into the Chinese market, with plans to launch around 50 new energy products by 2030.