FAW-Volkswagen to Accelerate in 2026

In 2025, China's automotive landscape continued to reshape under the tide of electrification. Data from the China Passenger Car Association (CPCA) shows that the penetration rate of new energy vehicles (NEVs) has surpassed 50%, shifting the competitive focus from mere product specifications to a contest of systemic capabilities.

Meanwhile, the traditional internal combustion engine (ICE) market has entered a phase of fighting for existing share, with total sales undergoing structural contraction and market share accelerating toward top brands. Against this backdrop, the transition path of FAW-Volkswagen—a long-time sales leader among Chinese joint ventures—is drawing close industry attention.

According to official data from FAW-Volkswagen, the company achieved vehicle sales of 1.587 million units in 2025, ranking first among Chinese joint ventures for the seventh consecutive year and holding the top spot in the ICE segment. Its cumulative production and sales also surpassed 30 million units in 2025.

Image source: FAW-Volkswagen

Facing industry shifts, FAW-Volkswagen has designated "Sharpening and Renewing" as its development theme for 2026, systematically proposing a strategy to "stabilize the foundation, strengthen smart electrification, and forge a new landscape." These moves essentially represent the traditional giant's attempt to balance immediate survival with future development during the transition period of "oil-electric coexistence."

Stabilizing the Foundation: Holding Ground in the ICE Market

Despite market compression, ICE vehicles remain the bedrock of FAW-Volkswagen's sales and profits. In 2025, its Volkswagen, Audi, and Jetta brands all consolidated or increased their share in the ICE market. Notably, the Audi brand saw its ranking improve in the domestic luxury ICE segment. Stabilizing this base was achieved not through inertia, but through product iteration, technological empowerment, and adjustments to marketing models.

Image source: FAW-Volkswagen

In the core A+ sedan segment, the Sagitar family sold over 250,000 units in 2025, maintaining its lead among ICE sedans. Mainstay models like the Magotan and Tayron also sustained market interest through updates. This indicates that in a stock market, classic models still command a loyal user base, thanks to mature reputations, reliable quality, and targeted upgrades.

Today, intelligence has become key to enhancing ICE value—countering the industry perception that "only EVs are smart." FAW-Volkswagen is committed to bringing intelligent technology to ICE models. According to its plan, all new ICE vehicles launched in 2026, including the new Sagitar S, Tayron S, and Audi Q5L/A6L, will feature next-generation smart cockpits and advanced driver-assistance systems. Furthermore, the company announced that within the next three years, it will complete the transition of all Volkswagen and Jetta ICE models to the new CEA electronic and electrical architecture, aiming to achieve comprehensive intelligence for ICE vehicles from the ground up.

A Dense Rollout of Electrified Products in 2026

While leading in the ICE market, FAW-Volkswagen still lags behind top domestic brands in NEV market share. The core of its "strengthen smart electrification" strategy is a dense product rollout starting in 2026 to accelerate the transition. The company targets raising the NEV sales mix to approximately 60% by 2030.

FAW-Volkswagen has defined 2026 as a "major year for new products," planning to launch 13 all-new models. For the first time, the number of NEV models (7) exceeds that of ICE models (6). The portfolio covers hybrids from the Volkswagen brand (such as the Magotan PHEV), a new all-electric series (ID.AURA), the Audi A6L e-tron based on the premium PPE platform, and Jetta's first NEV model, the J01. This creates a layout spanning mainstream to luxury segments with multiple technology paths. The company plans to further accelerate the launch pace of NEV products starting in the second half of 2026.

To strengthen the core competitiveness of its NEVs, FAW-Volkswagen has increased investment in localized R&D. Official information indicates that over the past year, it has carried out over 100 innovation projects and filed more than 100 patent applications. In battery safety, its testing items far exceed national standards; for core components like electric drive systems, it has also laid out self-developed, highly integrated solutions.

Notably, the Volkswagen brand's new all-electric series, ID.AURA, scheduled for 2026, is defined as the first model developed based on a localized Chinese platform and electronic architecture. This marks a profound shift in its R&D model from "global synchronous introduction" to "locally led definition."

Conclusion:

For FAW-Volkswagen, "stabilizing the foundation" and "strengthening smart electrification" are not simple either-or choices, but a dual-track strategy that must run in parallel for a considerable time.

A solid ICE business provides the necessary financial support and market buffer for strategic transformation, while a rapid and successful NEV offensive will likely determine its future market ranking.

In 2026, with the launch of up to 13 new models—especially the concentrated debut of 7 NEV products—FAW-Volkswagen's transition will enter a substantive critical phase. The key to success lies not merely in the volume of products, but in whether these new offerings can demonstrate genuine competitiveness in intelligent experience, electrification performance, and cost control, thereby winning back consumers on a NEV track dominated by local brands.

How a traditional giant defends its existing territory while exploring new growth frontiers—FAW-Volkswagen's practice in 2026 will provide a key case study for the industry.