Volkswagen sales plunge as German automaker lays out plan to slash number of brands

BERLIN (AP) — Volkswagen reported weak sales numbers on Friday, a day after the giant German automaker announced plans to slash the number of models by nearly half as sales plunged, particularly in China.

The Wolfsburg, Germany-based company said group sales fell 8.6% in the second quarter to just under 2.1 million vehicles, with sales in China alone plummeted by more than one-third.

After a board meeting on Thursday, Volkswagen said its “fundamental realignment” over the last three years had reached its next phase, announcing plans to streamline the model lineup by up to half, without providing specifics.

CEO Oliver Blume laid out plans to make VW faster and more competitive through less complexity, focused technologies, better alignment across regional markets and reduction of overcapacities, among other things, citing an “increasingly demanding environment.”

Among its main brands, the core Volkswagen unit saw deliveries of slightly over 1 million vehicles in the second quarter, a drop of 14% from a year earlier. Deliveries at Audi declined 8% and those at Porsche fell 18%.

Lamborghini, Skoda and the trucks unit reported upticks, and sales grew in the Americas and Europe.

Volkswagen cited dramatic change over the last year, including geopolitical tensions, rising costs mainly through tariffs, and increasing regulatory requirements alongside growing competition.

As recently as December, Volkswagen was betting big on China, where electric cars have been taking a greater market share and competition is stiff.

Research firm BernsteinSG, in a note after Thursday’s announcement, expressed skepticism. “VW stated that it is extending its technology leadership, a claim that will likely raise eyebrows given the pace of innovation among its Chinese competitors,” it said.

Also Thursday, hundreds of employees led a protest outside the Volkswagen plant in Zwickau to demand protections for jobs and voice opposition to plans to close the site. The factory has fully switched to making electric cars.