'Intense' competition in China weighs heavily on Volkswagen

11th Oct 2024 11:07

(Sharecast News) - Global car sales at Volkswagen Group fell sharply in the last quarter, the German manufacturer confirmed on Friday, dragged down by stiff competition in China.

The group, which also owns Audi, Porsche and Bentley, among others, said total deliveries to customers in the three months to September were down 7.1%, at 2.176m.

Sales of Volkswagen passenger cars, its biggest brand, fell 6.6% to 1.176m. But other marques also fell sharply: Porsche was down 7% at 70,100, Audi lost 16% to 402,600 and Bentley plunged 35.6% to 1,900.

Porsche's electric models were hit especially hard, sliding 25% in the quarter and 41% across the first nine months of the year.

Only two brands showed an uptick, with Skoda up 6% at 222,700 and Lamborghini ahead 18.7% at 2,900.

Marco Schubert, who sits on VW's extended executive committee for sales, said the company had seen significant growth in North and South America, but conditions had proved tougher in Europe and China.

"In Europe, we were able to keep our vehicle handovers to customers largely stable, but are experiencing significant headwinds from the market," he said. "The competitive situation in China is particularly intense, which is the main reason for the global decline in our deliveries."

In the nine months to September end, the number of vehicles delivered fell 1% in western Europe and 10% in China, offsetting growth of 7% and 15% in North and South America respectively.

Looking ahead, Schubert said: "In the coming months, numerous attractive new models across all brands will strengthen our market position worldwide.

"However, a better cost base, particularly in Germany, is essential to remain successful in this environment in the future."

VW is currently in annual pay discussions with workers. The carmaker - Europe's biggest - wants to cut jobs and potentially close plants, as it looks to turn the business around and bolster under-pressure earnings.

In particular, it wants to end a decades-old agreement to protect jobs at German factories in July 2025, four years early.

Unions have reacted furiously, however, and have already warned of strikes later this year should VW push ahead with its plans. VW currently employs around 130,000 people in Germany.

As at 1200 BST, shares in Volkswagen were down 1%.