Volkswagen said on Friday that a decline in sales accelerated in the second quarter, as the crisis-hit German auto group reportedly considered cutting up to 100,000 jobs worldwide.
Overall vehicle shipments fell almost nine percent in the April-June period from a year earlier thanks to falling demand in China, VW said.
Sales had fallen just four percent in the first quarter.
“The situation in China remains challenging and we were unable to escape a clearly declining overall market,” VW executive Marco Schubert said in a statement.
This was “despite initial positive momentum from our newly introduced domestically developed electric vehicles there,” he added.
Europe’s biggest carmaker is under heavy pressure from US tariffs, smaller profit margins on electric cars and, above all, intense competition in China, the world’s biggest car market.
The 10-brand group, which in addition to its name also includes brands such as Audi and Porsche, plans to lay off at least 50,000 in Germany by 2030.
But recent media reports have suggested the firm is aiming to cut up to 100,000 jobs worldwide, as well as closing four factories in Germany.
Germany’s powerful IG Metall union staged protests at VW sites across the country on Thursday as management presented their cost-cutting plans to the supervisory board.
There were no major announcements on Thursday, with VW simply repeating earlier plans to cut capacity and its model line, and analysts said talks were likely to take time.
“At the moment, people are sharpening their swords and strengthening their positions,” auto analyst Stefan Bratzel of the Automotive Management Center told AFP.
“This will drag on for months and months.”
– Weakness –
Volkswagen executives have repeatedly stressed the need to slim down the company as declining sales in China begin to look less like a setback and more like the new normal.
It’s a crisis hitting the entire German car industry – BMW said on Friday that its second-quarter car sales had fallen almost five percent worldwide, dragged down by a 30.2 percent drop in China.
Chinese brands are also threatening Volkswagen on its home turf.
According to automotive intelligence firm Dataforce, companies such as Geely, Xpeng and BYD took nine percent of the European market in March, up from almost zero three years ago.
“The Chinese are coming to Europe, also building factories that are very efficient,” warned Volkswagen CEO Oliver Blume in April. “We can’t compete with idle plants.”
But workers’ representatives and the German state of Lower Saxony – both of which take a dim view of potential factory closures – together hold more than half the seats on VW’s supervisory board.
This means that any major restructuring is uncertain and will be hard fought.
“Basically, Volkswagen is too big, too complex, too expensive and too slow,” said auto analyst Bratzel.
