Volkswagen plans to ship more Chinese-made vehicles overseas to offset domestic pressures and exploit lower manufacturing costs.

The German group has already started exporting cars from China to the Middle East and Southeast Asia, and is weighing sales of newly developed Chinese models in Africa and South America, CEO Oliver Blume told Bloomberg.

The move comes as the company reorganizes its Chinese operations to better compete with domestic electric vehicle producers led by BYD, including relocating more research and development work locally and forming a software partnership with Xpeng.

Volkswagen plans to launch 20 new electrified models in China this year as it seeks to recover from a slump that saw deliveries drop to around 2.7 million last year, down from more than four million before the pandemic.

The slump has hit Porsche particularly hard, with sales falling sharply amid weaker demand for luxury cars.

Porsche manufactures solely in Europe and has run into commercial hurdles in both the US and China, while Volkswagen is prioritizing a new electronics architecture built with Xpeng to suit local customer tastes.

Production of the first model has begun with the platform, although the company has not revealed pricing for the ID. The UNYX 07 electric sedan will reach customers later this year.

Alongside its strategy in China, the group is restructuring more broadly in response to weak demand there, US tariffs and uneven European sales, including reducing its workforce and expanding its hybrid range.

According to the report, Volkswagen expects 2026 to be a transition year in China, aiming to grow sales of electrified vehicles without necessarily increasing global volumes.

The company is also looking to remain among the top three automakers in the country and increase its market share to 15% by 2030 from 11%.

Earlier this month, the Brand Group Core of the Volkswagen Group announced a major restructuring plan which will streamline management layers and integrate production and development functions across its high-volume brands.

The automaker said the production changes alone are expected to generate cumulative savings of 1 billion euros ($1.16 billion) by 2030.

“Volkswagen looks to foreign markets for Chinese-made cars: report” was originally created and published by Automatic onlya trademark owned by GlobalData.

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