Volkswagen posts biggest sales drop in four years due to collapse in demand in China

German automotive concern Volkswagen Group recorded its largest quarterly decline in global vehicle deliveries since 2022. In the third quarter of 2026, sales decreased by 14.3% year-on-year. The main reason was a sharp deterioration in the Chinese market, where the concern lost almost 40% of sales.

This is stated in the report released on October 12 by Volkswagen Group. The results were also covered by German and international business publications.

According to the company, in July-September, the concern delivered 1.885 million vehicles to customers worldwide, compared to 2.199 million in the same period of 2025. Thus, quarterly deliveries decreased by more than 313 thousand vehicles.

The 14.3% drop was the deepest since the second quarter of 2022, when Volkswagen deliveries fell by 22.4%.

Volkswagen recorded its largest losses in China

China, which remains one of the key markets for the German automotive concern, accounted for the bulk of the global sales decline.

In the third quarter, Volkswagen Group sold only 405.8 thousand vehicles in China, down from 660.3 thousand a year earlier. The decline was 38.5%, or almost 255 thousand vehicles.

Over the first nine months, Chinese deliveries fell by 30.2% - to 1.379 million vehicles. A year earlier, in the same period, the concern sold almost 1.974 million vehicles in this market.

Volkswagen attributes the worsened results to the overall downturn in the Chinese automotive market, especially in the segment of vehicles with internal combustion engines. Additional pressure comes from competition with local manufacturers actively expanding their offerings of electric vehicles and hybrid models.

"The significant contraction of the Chinese market remains a challenge for the entire industry", - noted Martin Sander, member of the extended executive committee of Volkswagen Group for sales.

At the same time, the company reported the first positive results of its new electrification strategy in China. In the third quarter, deliveries of electrified vehicles, including hybrids, grew by about 30%. However, this is still not enough to offset the overall sales decline.

Sales declined in almost all major markets

The negative dynamics were not limited to China. In the third quarter, Volkswagen Group deliveries also decreased in Western Europe by 2.8%, in North America by 5.8%, and in South America by 2.4%.

The only major region where the concern showed growth was Central and Eastern Europe. Here sales increased by 1.4% - to 135 thousand vehicles.

The most noticeable declines among the major automotive brands of Volkswagen Group were recorded by:

• Volkswagen Passenger Cars - by 19.3%, to 946.6 thousand vehicles;
• Audi - by 19.7%, to 314.9 thousand vehicles;
• Porsche - by 15%, to 56.2 thousand vehicles;
• Bentley - by 25.5%, to 1.8 thousand vehicles.

Meanwhile, the Škoda brand practically maintained last year's performance, increasing deliveries by 0.2% - to 256.7 thousand vehicles. The truck division TRATON, which includes Scania and MAN, increased quarterly sales by 10.5%.

In total, over the first nine months, Volkswagen Group delivered 6.011 million vehicles. This is 9% less than in January-September 2025, when the company sold 6.604 million vehicles.

Volkswagen's management emphasizes that, excluding China, deliveries over the nine months remained generally stable. Growth in Europe and South America partially offset the weaker results in other regions.

European demand for electric vehicles grows despite overall decline

Volkswagen separately noted positive dynamics in the electric vehicle business in Europe.

In the third quarter, deliveries of fully electric vehicles by the concern in the European market increased by 19.6% - to 209.1 thousand vehicles. At the same time, globally they decreased by 4.7%, to 240.2 thousand units, due to weaker results in China and the USA.

In the United States, quarterly sales of electric vehicles by Volkswagen Group fell by 86.4%. The company links the worsening situation to the completion of government subsidy programs for electric vehicles and high import tariffs.

In contrast, in Europe demand is supported by high fuel prices and the emergence of more affordable electric models.

According to Sander, electric vehicles already account for approximately 20% of all deliveries of the concern in Europe, and their share in the order book has reached about 40%.

Especially successful was the launch of the new compact electric vehicles lineup Electric Urban Car Family, which includes Volkswagen ID. Polo, ID. Cross, Škoda Epiq and CUPRA Raval. According to the company, after the introduction of the new models, it received almost 150 thousand orders.

The concern is undergoing extensive restructuring

The decline in sales occurs against the backdrop of extensive restructuring of Volkswagen Group aimed at reducing costs and enhancing competitiveness.

In September, the company's supervisory board approved a new stage of restructuring, which includes additional reduction of approximately 50 thousand jobs. Together with previous agreements, the total number of positions that may be cut by the end of the decade amounts to about 100 thousand.

Volkswagen also plans to reduce the number of models and configurations, simplify the management structure, and cut production costs.

One of the main challenges remains China, where German automakers are losing market share amid intensified local competition. New quarterly results indicate that this pressure continues to affect Volkswagen's global sales, despite gradual growth in demand for electric vehicles in Europe.

According to materials from: Volkswagen Group, Der Standard, The Wall Street Journal