Volkswagen has revealed a significant drop in its vehicle deliveries in China during the first quarter of 2025, highlighting ongoing challenges for the German automotive giant in a market dominated by fierce local competition, particularly in the electric vehicle (EV) sector.
The company reported a 7.1 percent decline in vehicle deliveries in China compared to the same period in 2024. This downturn came despite a 1.4 percent increase in global deliveries. The figures were more concerning for electric vehicles, with a dramatic 36.8 percent fall in Chinese EV deliveries, even as global EV sales surged nearly 59 percent, buoyed by stronger demand in Europe and the Americas.
China remains Volkswagen’s largest single market, accounting for roughly 30 percent of total sales across its 10-brand portfolio. However, the brand has been steadily losing ground to domestic manufacturers like BYD, which are producing more affordable EVs that align better with local preferences.
A company spokesperson downplayed the setback, stating the Chinese figures were “in line with our expectations” given the “highly competitive market environment”. He emphasised that Volkswagen was prioritising long-term strategy over short-term volume gains.
Beyond its struggles in China, Volkswagen is also grappling with rising labour costs in Germany and tepid EV demand in several international markets. In response to broader financial pressures, the carmaker reached an agreement last year with labour unions to cut 35,000 jobs in Germany bykkkkkiiiii8iiiiiiiiioi8i8i88 2030.
Despite the current challenges, Volkswagen’s Chief Financial Officer Arno Antlitz expressed optimism in December, saying the company expects to begin reclaiming market share in China by 2026.
Meanwhile, Volkswagen’s stock slipped by around 0.5 percent in Frankfurt trading, extending a broader decline of roughly 16 percent since late March. Investor sentiment has been dented by the recent announcement from former US President Donald Trump of a 25 percent tariff on imported vehicles. The United States was the top importer of German cars last year, accounting for 13.1 percent of the 3.4 million vehicles exported, according to the federal statistics agency, Destatis. The new levies pose a serious threat to German automakers’ access to the American market.
