BUSINESS

China Dealer Halts Porsche, VW Stores Amid Price War

Published: Dec. 27, 2025 7:20 p.m. GMT+8

00:00

00:00/00:00

Listen to this article 1x

A Porsche dealership. Photo: VCG

A Chinese dealership group has suspended operations at two Porsche centers and a Volkswagen outlet, underscoring mounting pressure on foreign automakers and their retail networks as China’s auto price war squeezes cash flow.

Dongan Holding Group said Friday that it had halted business at two Porsche dealerships in Zhengzhou and Guiyang, as well as a Volkswagen store in Zhengzhou.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

Dongan Holding Group suspended operations at two Porsche dealerships and one Volkswagen outlet in China due to weak demand and tough competition.
Employees are on leave with minimum pay; customers face delays getting vehicle certificates required for registration.
Porsche China sales fell from 96,000 in 2022 to 57,000 in 2023, with a further 26% drop in the first three quarters of 2024.

AI generated, for reference only

Who’s Who

Dongan Holding Group: Dongan Holding Group, a Chinese dealership group, has suspended operations at two Porsche centers and one Volkswagen outlet. They cited a deteriorating economic environment, weak consumer demand, and intense competition as reasons, leading to cash flow issues. The group is negotiating with banks and manufacturers to release vehicle certificates of conformity for customers affected by the closures.

Porsche: Porsche is facing significant challenges in the Chinese market, with sales dropping from 96,000 vehicles in 2022 to 57,000 last year, and a further 26% decline in the first three quarters of this year. These struggles led to a protest by its Chinese retailers in May 2024 due to inventory and sales target pressures. Despite this, Porsche remains committed to China, opening its largest R&D center outside Germany in November to cater to local market demands.

Volkswagen: A Chinese dealership group, Dongan Holding Group, has suspended operations at a Volkswagen store in Zhengzhou due to a deteriorating economic environment, weakening consumer demand, and intense industry competition. This closure highlights the growing stress on traditional dealership models in China's rapidly changing automotive market.

Porsche China: Porsche China has been affected by declining sales, with a significant drop from 96,000 vehicles in 2022 to 57,000 last year, and a further 26% decrease in the first three quarters of this year. Despite these challenges, Porsche remains committed to the Chinese market, evidenced by the opening of a new R&D center there in November, its largest outside Germany. The company also apologized to customers affected by dealership suspensions and stated it is prioritizing consumer rights.

AI generated, for reference only

What Happened When

2022：: Porsche sales in China were about 96,000 vehicles.

2023：: Porsche sales in China fell to 57,000 vehicles.

May 2024：: Pressure on dealers became visible when Porsche retailers in China staged a joint protest over inventory burdens and sales targets.

First three quarters of 2025：: Porsche sales in China dropped 26% year-on-year to 43,000 units.

November 2025：: Porsche opened a new R&D center in China — its largest outside Germany.

2025-12-26：: Porsche China apologized to customers about the dealer situation and said it was working with authorities to verify the situation.

2025-12-27：: Dongan Holding Group announced suspension of operations at two Porsche dealerships in Zhengzhou and Guiyang, and a Volkswagen store in Zhengzhou. Employees were placed on leave, and a plan was made to settle outstanding salaries within 60 days from this date.