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VW sales plunge as automaker plans to halve number of brands
Sales fell 8.6% in the second quarter to just under 2.1 million vehicles
Volkswagen employees and IG Metall union members rally on the grounds of the Volkswagen headquarters on the day of the supervisory board meeting in Wolfsburg, Germany. (Lisi Niesner/Pool Photo via AP)
Key Takeaways:
- Volkswagen reported July 10 that second-quarter global sales fell 8.6% to just under 2.1 million vehicles, with a sharp decline in China.
- Sales dropped more than one-third in China and declined across key brands, reflecting rising competition, tariffs and regulatory pressures in a challenging global environment.
- The company plans to cut its model lineup by up to half and faces employee protests as it pursues a broader restructuring to improve competitiveness.
BERLIN — Volkswagen reported weak sales numbers July 10, a day after the giant German automaker announced plans to slash the number of models by nearly half as sales plunged, particularly in China.
The Wolfsburg, Germany-based company said group sales fell 8.6% in the second quarter to just under 2.1 million vehicles, as sales in China alone plummeted by more than one-third.
READ MORE: VW labor leaders pledge to fight deeper cuts pushed by CEO
After a board meeting on July 9, Volkswagen said its “fundamental realignment” over the last three years had reached its next phase, announcing plans to streamline the model lineup by up to half, without providing specifics.
CEO Oliver Blume laid out plans to make VW faster and more competitive through less complexity, focused technologies, better alignment across regional markets and reduction of overcapacities, among other things, citing an “increasingly demanding environment.”
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Blume
Among its main brands, the core Volkswagen unit saw deliveries of slightly over 1 million vehicles in the second quarter, a drop of 14% from a year earlier. Deliveries at Audi declined 8% and those at Porsche fell 18%.
Lamborghini, Skoda and the trucks unit reported upticks, and sales grew in the Americas and Europe.
Volkswagen cited dramatic change over the last year, including geopolitical tensions, rising costs mainly through tariffs, and increasing regulatory requirements alongside growing competition.
As recently as December, Volkswagen was betting big on China, where electric cars have been taking a greater market share and competition is stiff.
Research firm BernsteinSG, in a note after the July 9 announcement, expressed skepticism. “VW stated that it is extending its technology leadership, a claim that will likely raise eyebrows given the pace of innovation among its Chinese competitors,” it said.
Also July 9, hundreds of employees led a protest outside the Volkswagen plant in Zwickau to demand protections for jobs and voice opposition to plans to close the site. The factory has fully switched to making electric cars.
