(July 10): BMW AG and Volkswagen AG’s vehicle sales fell in the second quarter due to a worsening decline in China, where mounting competition from domestic rivals and a property crisis is stifling demand.
Both manufacturers on Friday reported waning global sales in the period, dragged down by stark declines in China, where local manufacturers led by BYD Co dominate on electric cars. Sales of the BMW and Mini brands in the Asian country slumped 30%, while Volkswagen’s group deliveries there cratered 37%.
The numbers cap a difficult week for Germany’s auto industry. Both Porsche AG and Mercedes-Benz Group AG already reported falling deliveries citing China, where a protracted real estate crisis is eroding the spending power of affluent buyers. They are also grappling with high energy and labour costs in Europe and President Donald Trump’s import tariffs in the lucrative US market.
Volkswagen is trying to navigate these challenges by becoming leaner and more agile. The group that owns brands including Porsche, Audi and Seat plans to cut its sprawling model line-up by as much as 50%, it said late on Thursday after a meeting of the supervisory board that failed to agree on more sweeping cutbacks.
Chief executive officer Oliver Blume was expected to push for doubling job cuts to 100,000 and closing four German plants, but the committee didn’t back these more drastic measures, resulting in only vague plans to cut back on model derivatives. Details had leaked through in the past days, irking Volkswagen’s powerful labour representatives.
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BMW CEO Milan Nedeljkovic also plans to intensify cost-cutting measures and last month slashed the company’s 2026 financial guidance. BMW is now projecting a potential margin that puts it on course to be the least profitable major European automaker.
Volkswagen shares declined as much as 1.4% in Frankfurt. BMW were up 0.7% as of 11.43am local time. The stock is still down around 37% this year.
BMW had been on more solid footing compared to peers in the face of the difficult transition to electric vehicles (EVs). Unlike Mercedes or Volkswagen, the Munich-based company stuck with a more flexible plan to make a range of drivetrains, setting it up to better withstand disappointing EV demand and policy reversals in the US.
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BMW has begun rolling out the first of dozens of new and updated vehicles on its Neue Klasse platform, which the company spent more than EUR10 billion (US$11.4 billion or $14.8 billion) to develop. This year, it is introducing a Chinese version of the first model of that line, the iX3 sport utility vehicle, in hopes of generating fresh demand.
There were some positive developments. BMW’s sales rose in the US and in Europe, where demand for electric cars is up. BMW said the iX3 is on track to reach 100,000 orders, with the i3 sedan also sparking “high demand”.
Volkswagen also reported rising vehicle deliveries in Europe and North America in the three months through June. Its order book for EVs in Europe has grown by more than 50% compared to the end of last year. Still, key brands such as Porsche, Audi and the Volkswagen nameplate reported falling global sales in the period.
Uploaded by Tham Yek Lee
