Volkswagen sales drop by a fifth in Europe

Volkswagen Group sales fell by around a fifth in the first half of this year from a year earlier, company data showed on Friday, led by a steep drop in Europe, but battery-electric sales were boosted by growth in China.

Total deliveries to customers worldwide were down 22.4 per cent in the second quarter of the year, with Central and Eastern Europe, which included Russia, hardest hit with a drop of 49.3 per cent.

Western Europe also saw a considerable fall of 25.7 per cent, while China and the Americas saw a more moderate drop of around 16-18 per cent.

Even as total sales fell, battery-electric vehicle (BEV) deliveries increased by just over a quarter to 217,100, making up 5.6 per cent of total sales — bolstered largely by significant growth in China.

While Europe, traditionally Volkswagen’s strongest battery-electric market, saw a 16.5 per cent drop in BEV sales in the second quarter, sales more than doubled in China, where the carmaker has long lagged local competitors and Tesla.

In the first half of the year, Volkswagen’s China BEV sales saw a more than three-fold increase from last year to 63,500 units.

Speaking to journalists earlier on Wednesday, Volkswagen’s China chief said it “looks promising” for sales of its ID electric vehicles to more than double this year in the country as the German carmaker ramps up electrification efforts to retain the top position in its biggest market.

The ID.4 far outsold other battery-electric models globally at 66,800 units sold, followed by 26,000 ID.3 vehicles and 24,700 Audi e-tron cars.

Data released by Europe’s automobile association earlier on Wednesday showed the region registered the lowest number of new passenger cars in the month of June since 1996 as supply chain bottlenecks, inflation and coronavirus cases continue to plague the industry. Volkswagen China on Friday stuck to its goal of doubling sales of its ID series of electric vehicles this year despite COVID-19 disruptions, with its chief calling the target “promising”.

The ID series, which Volkswagen produces at its Chinese joint ventures with SAIC Motor (600104.SS) and FAW Group, is the backbone of its electric vehicle (EV) ambitions in China, the world’s largest auto market.

VW is expecting to deliver 15,000 to 20,000 of the ID cars per month in the upcoming months, Stephan Wollenstein, the company’s China CEO told a media briefing on Friday. “We hope that we can also get the necessary parts in place,” Wollenstein said. “By doing so, we will then be able by the end of the year to have sales of IDs more than double compared to last year.”