Volkswagen Group's Sales Struggles Continue Amid Portfolio Downsizing

Key Takeaways

• Volkswagen Group’s sales fell 8.6 percent in Q2, with China being a major contributor to the decline.
• The company plans to downsize its portfolio by up to 50 percent, focusing on products and technologies that deliver the greatest added value for customers.
• Volkswagen Group’s sales in North America are on an upswing, with the mainstream Volkswagen brand seeing a 24.9 percent increase in sales in the US.
• Porsche sales continue to fall, with nearly every model down except for the 911.
• Audi of America struggled, with sales dipping 3.0 percent from April to June.

What’s Behind Volkswagen Group’s Sales Decline?

Volkswagen Group’s sales fell 8.6 percent in Q2, with China being a major contributor to the decline. The company’s sales in China fell 36.6 percent from April to June, and were down 25.9 percent for the year.

The decline in China was driven by a significant total market decline of around 20 percent, despite initial positive momentum from newly introduced, locally developed electric vehicles.

Globally, Volkswagen Group is seeing a decline in deliveries of around six percent.

How Is VW Group Doing In North America?

Volkswagen Group sales are on an upswing in North America after a slow start to the year, rising 7.7 percent last quarter.

The mainstream Volkswagen brand had a strong quarter in the United States, with sales increasing a stunning 24.9 percent. The German brand sold nearly 90,000 cars in just three months, led by the Tiguan, up 152.5 percent.

Sales for the Jetta, Golf GTI, and Golf R all increased by 9.7 percent, 17.2 percent, and 12.5 percent, respectively.

What Comes Next For Volkswagen Group?

Volkswagen Group plans to downsize its portfolio by up to 50 percent, focusing on products and technologies that deliver the greatest added value for customers and the highest value contribution to the Group.

The company will also reduce its annual production capacity to 9.0 million units, down from 12.0 million vehicles.

The drastic changes might not be enough to right the ship, with rumors that Volkswagen might close four plants and lay off 100,000 employees.

How Does This Affect the Industry?

Volkswagen Group’s struggling performance represents the overall challenges facing the industry. New tariffs, changing regulations, and competition are making VW Group and other automakers refocus their resources on brands and models that sell.

This trend is likely to continue, with other automakers also downsizing their portfolios and focusing on their most profitable models.

Frequently Asked Questions

Q: What is behind Volkswagen Group’s sales decline?

A: The decline in China was driven by a significant total market decline of around 20 percent, despite initial positive momentum from newly introduced, locally developed electric vehicles.

Q: How is Volkswagen Group doing in North America?

A: Volkswagen Group sales are on an upswing in North America after a slow start to the year, rising 7.7 percent last quarter. The mainstream Volkswagen brand had a strong quarter in the United States, with sales increasing a stunning 24.9 percent.

Q: What is Volkswagen Group’s plan to turn things around?

A: Volkswagen Group plans to downsize its portfolio by up to 50 percent, focusing on products and technologies that deliver the greatest added value for customers and the highest value contribution to the Group.