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Highlights:
- Global Sales Decline: Volkswagen Group’s total vehicle deliveries fell 7.1% in Q3, with significant declines in major brands such as Audi and Porsche.
- Challenges in China: Intense competition in China has been a primary factor behind the global sales decline.
- Job Cuts Looming: Volkswagen plans to cut jobs and potentially close plants, facing opposition from unions.
Volkswagen Group (LSE:0P6N), one of the world’s largest car manufacturers, reported a significant drop in global sales for the last quarter, driven primarily by increasing competition in China. The German automaker, which owns brands such as Audi, Porsche, and Bentley, revealed on Friday that total deliveries to customers for the three months ending in September had fallen by 7.1%, reaching 2.176 million vehicles.
Sales of its flagship Volkswagen passenger cars fell by 6.6% to 1.176 million units. However, other brands under the group also reported significant declines. Porsche sales fell by 7%, delivering 70,100 cars, while Audi experienced a 16% drop to 402,600 units, and Bentley saw a dramatic 35.6% plunge, selling just 1,900 vehicles. Porsche's electric models were particularly hard hit, suffering a 25% decline during the quarter and a 41% drop in the first nine months of 2024.
Despite the overall downward trend, two brands saw positive growth. Skoda reported a 6% increase in deliveries to 222,700 units, and Lamborghini saw an 18.7% surge, delivering 2,900 vehicles.
Competition and Challenges
Marco Schubert, a member of Volkswagen’s extended executive committee for sales, highlighted that while the company saw growth in North and South America, conditions were challenging in Europe and especially in China. "The competitive situation in China is particularly intense, which is the main reason for the global decline in our deliveries," Schubert stated.
He noted that while deliveries remained relatively stable in Europe, the company faced significant headwinds in the market. In the first nine months of 2024, Volkswagen’s vehicle deliveries fell by 1% in Western Europe and 10% in China, partially offset by 7% and 15% growth in North and South America, respectively.
Looking Ahead
Schubert expressed optimism about the future, with numerous new models set to launch across all brands, which Volkswagen expects to strengthen its global market position. However, he emphasized the need for a better cost base, particularly in Germany, to remain competitive.
Volkswagen is currently engaged in annual pay discussions with its workers and is considering cutting jobs and potentially closing plants to improve earnings. The automaker is also looking to end a decades-old job protection agreement at its German factories by 2025, four years earlier than originally planned. The move has drawn strong opposition from unions, which have threatened strikes if the company proceeds with these measures. Volkswagen employs around 130,000 people in Germany.
As of 1200 BST, Volkswagen’s shares were down 1%.
