Volkswagen sustains sales in Europe, but slips in China

Sales keep troubling the German automotive giant Volkswagen Group. Its latest results published on Friday report encouraging growth for the Western European market, but registrations are further decreasing in the crucial Chinese marketplace.

In July, Volkswagen delivered 770 000 vehicles, an increase of 12,8% compared to 2022, which was particularly cumbersome because of supply chain issues and material shortages. Europe took delivery of 274 500 units, a significantly better result (+21,4%) compared to the year before.

Of course, this performance coincides with the solid overall market in Europe, which grew 17,9% in the first half of the year, according to the latest figures from the European manufacturer’s association ACEA.

Weak Porsche

The brands that are doing well are Audi (+14,7%), Skoda (+17,4%), and Seat/Cupra (+45,7%). For the brand Volkswagen, deliveries dropped by 0,9%. Even more surprising is the weak summer at Porsche. While the sports carmaker posted encouraging growth in the first half of the year, registration slid by 7,2% in July.

But the real headache for the Volkswagen Group comes from the company’s largest market, China, where the car giant lost its crown this year as the top-ranking automotive group to local player BYD. In July, the group delivered 260 400 cars, a drop-off of 10,2% compared to the year before.

ID.3 surges by 300%

Continuously falling out of grace, Volkswagen knows its products aren’t the best match for local Chinese taste. It is one of the reasons why the German company has invested 700 million in carmaker Xpeng, a leader in autonomous driving tech. While its sales are gaining traction, Xpeng reported a record loss in the second quarter of 2023.

The worsening sales in China have also forced Volkswagen into the price war triggered by Tesla late last year. For a limited time, it has cut prices on the ID.3 in China – an offer that started last month with results included in the above figures. As a result, ID.3 sales have climbed by 305%. With 7 378 units sold, it was also the first time the all-electric compact surpassed the 5 000 mark in China.

But that spark isn’t blowing away the darkening clouds above headquarters in Wolfsburg. CEO of Volkswagen Group Oliver Blume has adjusted this year’s initial forecast of vehicle deliveries. Down from 9,5 million units, he claimed that expectations are to land between 9 million and 95 million.