Volkswagen’s plan to combat China’s success in Australia
This global giant is banking on Aussies wanting more than just a cheap price when they embark on their next car buy.
As Chinese car sales go gangbusters in Australia, Volkswagen bosses insist buyers still seek overall value ahead of rock-bottom prices.
At the local launch of the brand’s new German-built Tayron seven-seat SUV, Arjun Nidigallu, head of product of Volkswagen passenger vehicles, said they didn’t see Chinese brands as a direct threat, but a “changing dimension in the market.”
Last month’s new car sales figures showed four Chinese carmakers – MG, GWM, BYD and Chery – make the top ten for the first time.
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By contrast, Volkswagen’s Australian sales have been on the slide, dropping 18 per cent so far in 2025, following a slump of 16 per cent last year.
But the German brand is enjoying a new model offensive, with the Tiguan Allspace-replacing Tayron joining updated versions of the Golf, Tiguan and Multivan.
Full electric ID. 4, ID. 5 and ID. Buzz models are now also in VW showrooms, and taking advantage of a surgex` in plug-in hybrid (PHEV) sales, Tiguan and Tayron PHEVs are locked in for the first half of 2026.
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Nidigallu said the PHEV technology would be available across more affordable grades, and that their pure electric range would be “over 100 kilometres”.
He also said Volkswagen needed to “communicate about the driveability” of its cars to be competitive in the face of new brands.
“If buyers come in and back-to-back test a Chinese product and our product, they can see the value in the difference in pricing,” he said.
The new Tayron seven-seater costs from $48,290 plus on-road costs, or around $53,000 to drive away.
That makes it competitive next to large SUV rivals like the Hyundai Santa Fe (from $53,000), Kia Sorento (from $50,880) and Toyota Kluger (from $62,410), but significantly above the cheapie Chinese.
Chery’s strong-selling three-row Tiggo 8 Pro costs from $38,990 drive-away, and LDV’s D90 from $41,490 on the road.
Post-Covid, Australians have seen a big jump in new car prices – particularly from long-established legacy brands – with increased costs of raw materials, energy and freight to blame.
Demands for higher specification, technology and safety have also pushed up prices.
The most affordable Volkswagens today are the city-sized Polo hatch and T-Roc SUV, both on offer at $32,990 drive-away.
VW’s ever-present Golf hatchback? You now can’t drive one of those away for under $40,000.
Volkswagen Australia’s director of passenger cars, Piergiorgio Minto, said the increasingly popular Chinese car brands were “still lacking a couple of basic components in the business model of the car industry.”
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Minto suggested Volkswagen’s long history of selling cars in Australia meant they were commonplace and familiar on our roads and “we can have a better network; the servicing and taking care of the customer more-or-less everywhere in the country, and in a proper way,” he said.
He acknowledged the Chinese were going strong and “if we want it or not, they are going to grab their share of the market for the future.
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They are lacking, of course, a little bit of heritage. That still has value for a customer in my opinion.”
The Australian car industry will be watching closely if the current Chinese surge will be sustained.
And will the likes of BYD, GWM, MG and Chery being ahead of stalwarts like Subaru, Nissan, BMW and Volkswagen be the new normal?
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