Volkswagen flags Chinese competition in Brazil, sees limited Iran impact

By Rodrigo Viga ‌Gaier

RIO DE ​JANEIRO, ​May 18 (Reuters) - Volkswagen is concerned about declining resale values of its vehicles as lower-priced Chinese ‌competitors expand in the Brazilian market, the company's ⁠head in Brazil, Ciro Possobom, told Reuters on Monday.

"While new ‌entrants are entering aggressively ‌and putting downward pressure on prices, we believe we are well positioned," Possobom said, adding that the ​company will not engage in a price war with Chinese competitors.

Chinese automakers have rapidly expanded in ⁠Brazil, gaining market share with lower-priced electric and hybrid models and intensifying ​competition in the region's largest auto market.

He added that the war in Iran has ​had both direct and indirect ‌impacts on Volkswagen's operations, but despite the geopolitical tensions, supply chain disruptions remain manageable ⁠and have not led to vehicle price increases.

Volkswagen has resorted to flying in some components as shipping routes through ⁠the Strait of Hormuz face uncertainty. "We hope the war ends ​soon, especially since we import about 20% of the parts," he said.

The company does not expect parts shortages to significantly affect ‌production or pricing for now, Possobom added.

Possobom was positive on the group's recent ‌performance, saying April was a strong month for the ⁠automaker in Brazil, outperforming ‌results from the ​first quarter of 2026.

(Reporting by Rodrigo Viga Gaier; Writing by Isabel Teles; Editing by Kylie ‌Madry)

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