Volkswagen AG is ending its distribution partnership in the Philippines, marking a quiet close to its second attempt at a foothold in the Southeast Asian nation's competitive auto market.

Ayala Corp.’s Automobile Central Enterprise, Inc. (ACEI), the local distributor, announced on Facebook that it has “agreed to conclude the distribution of Volkswagen vehicles in the Philippines” with the German automaker.

The Volkswagen BGC dealership will close its doors on Sept. 30, 2025. The move comes after Volkswagen's initial re-entry into the Philippines in 2013, following a brief presence in the 1990s.

Despite its global brand recognition and a focus on premium and compact models like the Golf and Tiguan, the company struggled to gain significant market share against dominant Japanese rivals such as Toyota and Mitsubishi, and growing number of Chinese competitors.

The departure follows a broader trend of foreign automakers re-evaluating their strategies in markets where they face stiff competition.

While the brand’s new car sales will cease, the company has outlined a plan to continue after-sales support for existing customers. Servicing will be consolidated at two primary locations: one in Alabang, and another in Pampanga, with a service point in Cebu City also available.

“Your experience remains our top priority,” the company said in its statement, reassuring owners that their vehicles will continue to receive “expert care and support.”