The price war in China is leaving deep scars on Volkswagen sales. After a strong increase in May, deliveries in June in the Wolfsburg carmaker’s most important individual market fell by 14.5 percent, as Volkswagen announced on Friday. The decline was also so high because a particularly large number of vehicles were delivered in June last year, explained a spokesman. After the corona lockdowns, the Chinese government boosted car sales with tax breaks. China was the only region with a drop in sales last month. Business for Volkswagen was best in Western Europe, where the group improved by more than 30 percent within a year. In North America, the increase in sales was lower at 5.7 percent, and deliveries stagnated in South America. The bottom line in June was a worldwide increase in sales of almost six percent to around 848,000 vehicles. In the middle of the year, sales climbed by 12.8 percent to around 4.4 million units thanks to strong previous months.
China remains an Achilles heel
Volkswagen sold 321,600 electric cars worldwide in the first six months, 48 percent more electric cars than a year ago. The car group left the weak phase in China at the beginning of the year behind and increased battery-powered vehicles in the second quarter by 18 percent to 41,000 vehicles. After six months, there were 62,400 electric cars in the People’s Republic, two percent less than in the previous year. The Lower Saxony did worse than the Chinese market as a whole, which according to their own data has grown by 20 percent since the beginning of the year. A price war is currently raging on the electric car market in China. As a result, the western car manufacturers, which dominated in the past, are coming under massive pressure. Mercedes representatives recently reported that even traditional Chinese state manufacturers BAIC and SAIC, joint venture partners of Mercedes-Benz and Volkswagen, are struggling in the market currently led by BYD. According to its own statements, Volkswagen is largely staying out of the discount battle, but is granting price reductions for a limited period of time. VW China boss Ralf Brandstätter recently spoke of an “unhealthy competitive environment” in China. In the meantime, 16 manufacturers – including Tesla – are trying to avoid a ruinous price war at the instigation of the Chinese industry association CAAM.