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Recently, China's State Administration for Market Regulation announced that Volkswagen (China), SAIC Volkswagen, and FAW-Volkswagen have all filed recall plans covering more than 610,000 vehicles. The recall involves imported Golf and Tiguan models, as well as domestically produced Teramont, Teramont X, Viloran, Audi Q6, Talagon, Audi Q3, and other models. The recall stems from a potential defect: bolts connecting the subframe to the steering gear may fracture. The recall will officially begin on January 15, 2027.

Meanwhile, in Wolfsburg, Germany, on October 29, Volkswagen Group released its financial report for the first three quarters. Revenue stood at €233.38 billion, down 2.2% year-on-year, while operating profit plummeted from €5.408 billion to €71 million—a staggering decline of 98.7%.

A large-scale safety recall colliding with a profit trough—what exactly has happened to this giant that once dominated the global auto market for so long?

PART 01 The Overlord of Fuel Vehicles 01

For many people, their earliest memory of cars begins with Volkswagen. In the 1980s, the Santana entered China, and the saying "With a Santana, you can go anywhere without fear" became the collective memory of a generation. The Jetta, Lavida, Passat, and Magotan followed one after another, and Volkswagen almost single-handedly defined the standard for Chinese family sedans. At its peak, one out of every three sedans sold on Chinese roads was a Volkswagen. Globally, Volkswagen long ranked first in global automaker sales, with worldwide deliveries exceeding 10.7 million vehicles in 2017—a well-deserved automotive empire.

But the once all-powerful status of the fuel vehicle overlord has now become a heavy maintenance burden: the 610,000 vehicles recalled in China this time are only part of the global recall plan. As early as September 2026, the German Federal Motor Transport Authority had announced that the same steering bolt's risk of corrosion and fracture had led Volkswagen to recall about 2.86 million vehicles worldwide.

PART 02 Volkswagen's "German Disease" 02

Volkswagen itself no longer has much financial buffer. It finds itself in an awkward position: in the era of fuel vehicles, it was the king that set the standards; after switching to the new energy track, it can hardly offer a single main electric vehicle that people can remember. Consumers vote with their feet in a very straightforward way: with the same budget, domestic electric cars offer longer range, higher configuration, and better intelligence.

It is not hard to identify where the problem lies: intelligence alone is enough to stump Germans who are extremely lacking in internet software thinking. In the field of new energy vehicles, Volkswagen started quite early: in November 2019, the first model of the MEB pure electric platform, the ID.3, rolled off the line. This hatchback, dubbed the "electric Golf," was meant to be the showcase of Volkswagen's electrification transformation. But the car was built, yet the software could not be finished for a long time, and a large number of new cars could only be parked in temporarily rented sites waiting for delivery. After waiting for nearly a year, the ID.3 finally went on sale in Europe—and the problems came along with it: laggy infotainment, inability to connect to the internet, frequent fault codes, and black navigation screens.

In fact, around 2020, Volkswagen had already established the software subsidiary CARIAD, claiming it would spend tens of billions of euros to self-develop intelligent driving systems. But after several years, the money was burned through, yet the results were not good. System bugs also caused delays in the launch of multiple electric models from Audi and Porsche, missing the golden window period of the new energy market.

After setbacks in self-development, Volkswagen shifted its focus to external alliances: investing in Horizon Robotics, jointly developing vehicle architecture with XPeng, establishing Volkswagen Anhui, and also cooperating with SAIC to launch Audi electric models. But Volkswagen's "German disease" was also exposed: even if its technology is inferior to that of Chinese automakers, Volkswagen is still accustomed to "I lead, you assist." The core question of "who has the final say" has never been properly settled.

PART 03 A Big Ship Is Hard to Turn 03

On one side, new energy vehicle sales are below expectations; on the other side, fuel vehicle share continues to be squeezed. Volkswagen has thus been left behind step by step. After several years of transformation, Volkswagen's share of the global new energy market is still less than 7%; in the first three quarters of 2026, Volkswagen delivered 6.011 million vehicles globally, down 9% year-on-year, with a large part of the drag coming from the Chinese market. Because in China, the world's largest new energy market, its market share is only 1%.

Compared with domestic automakers, Volkswagen's electrification transformation cannot be called successful; however, among joint venture automakers, it is already considered the best—but the contrast with its former glory is too great.

At present, joint venture cars from the four major camps—German, Japanese, American, and Korean—are all being marginalized at an accelerated pace under the pressure of declining market share. For a traditional fuel vehicle company, dismantling processes and supply chains built over decades, and even requiring workers and engineers to relearn skills, is not something that can be done overnight. Many joint venture cars still have "electric vehicle teams supported by fuel vehicle teams," so conflicts of interest are natural. In the future, who can stay at the table is still full of uncertainty.

The era of "With a Santana, you can go anywhere without fear" has passed. Volkswagen is still relying on Porsche's brand premium and decades of technological accumulation to support its base, but the time left for its transformation is clearly no longer much.

END

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