Volkswagen Group reported a 7.1% drop in global sales in the third quarter. Sales fell to 2.176 million vehicles. In China, the largest auto market, sales dropped 15% to 711,500 vehicles. This highlights the severe challenges facing the European auto industry. Weak demand in China and high production costs in Europe contribute to these issues.
In the third quarter, Volkswagen Group boosted its pure electric vehicle sales in China by 5.2% year-on-year, reaching 57,500 units. Cost reduction drove this growth. However, globally, Volkswagen Group’s Q3 pure electric vehicle sales fell by 9.8% year-on-year to 189,400 units. In the U.S. market, the decline reached 41.7%.
The EU’s increased import tariffs on Chinese electric vehicles will impact European car manufacturers like Volkswagen Group. As Europe’s largest car manufacturer, Volkswagen Group is undergoing major reforms. Due to weak European demand, fierce competition from China, challenges of vehicle electrification, and high costs in Germany, Volkswagen Group is considering closing its German factories for the first time. Marco Schubert, a member of Volkswagen Group’s executive board, stated that reducing costs is crucial for future success, especially in Germany. He also noted that Volkswagen Group faces severe challenges in China. The company competes fiercely with local rivals offering more affordable electric models, severely squeezing its market share. A spokesperson for Volkswagen Group announced that the company has reduced the cost of producing pure electric vehicles in China. The spokesperson added that the company will not sacrifice profitability for market share.
Volkswagen Group lowered its annual sales forecast for the second time in three months. It expects to deliver about 9 million cars this year. This marks a decline compared to last year.