(Yicai) Nov. 6 -- Major multinational automakers, including Volkswagen Group, Ford Motor, and Stellantis, reported disappointing third-quarter sales in China as the country’s fast-growing electric vehicle market continued to favor local brands.

Volkswagen sold about 2.1 million cars in China in the first nine months of this year, marking a 10 percent year-on-year drop, according to its interim earnings report. Globally, the German owner of the Audi, Porsche, and Scania brands had a net profit of EUR1.6 billion (USD1.7 billion) in the September quarter, a 64 percent slump from a year ago, while revenue dipped 0.5 percent to EUR78.5 billion (USD84.2 billion).

Marco Schubert, a Volkswagen executive committee member, mainly attributed the decline in the carmaker’s third-quarter global deliveries to fierce competition in the Chinese market. 

Foreign carmakers are losing ground in the world's biggest auto market. As the Chinese market for combustion engine vehicles shrinks, local automakers such as BYD, Geely Holding Group, and Li Auto have been capitalizing on the surge in EV demand, offering more affordable options compared with their global counterparts.

Even the luxury segment faces challenges. Porsche logged a 29 percent drop in China sales, delivering just 43,000 vehicles over the first three quarters.

Other brands also reported double-digit declines. Ford sold 133,000 vehicles in China during the three months, a decrease of 11 percent. Stellantis, the parent company of brands such as Chrysler, Alfa Romeo, and Citroen, saw sales in China, India, and the Asia-Pacific region contract by 30 percent to just 14,000 units in the third quarter from a year ago.

General Motors managed to boost sales, but failed to make a profit. The US company recorded a 14 percent increase in Chinese retail sales, its largest single-quarter growth in two years. But GM still posted a loss of more than USD100 million, contributing to a total loss of around USD347 million in China over the nine months.

In a bid to turn around its performance in China, GM said it would continue to focus on the EV sector and improve the profitability of its sport utility vehicle lineup.

In response to falling sales, multinational carmakers have been restructuring their operations. Volkswagen’s joint venture with Shanghai-based SAIC Motor announced over a year ago the closure of its first factory.

Stellantis has moved to a ‘light-asset model’ by ending its JV with GAC Group and taking its Jeep operations independent. Ford, meanwhile, has been refocusing its efforts in China by exporting locally produced vehicles to markets in the Middle East, Southeast Asia, and the Americas, aiming to offset its sales losses in the domestic market.

Editors: Shi Yi, Emmi Laine