VW, one of the first western car companies to build vehicles in China, is pulling the plug on any future production expansion plans in the country. This comes amid plummeting market share for the company, along with a general glut of capacity facing the Chinese car industry. China is VW's second-biggest market, but in recent years they've been hit hard by increasing competition and have steadily lost market share (dropping from over 65% twenty years ago to 18% so far this year). VW plans to introduce its Skoda brand in two years in an attempt to turn things around, but I think it remains to be seen if that will be a successful tactic in the increasingly hectic Chinese auto market. What will probably provide better results is the company's plan to increase domestic content of vehicles that it builds in China, which will save a considerable but yet-unspecified amount of money.



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