Volkswagen sales drop in Europe but China offers EV boost

By Victoria Waldersee

BERLIN (Reuters) -Volkswagen Group sales fell by around a fifth in the first half of this year from a year earlier, company data showed on Friday, led by a steep drop in Europe, but battery-electric sales were boosted by growth in China.

Total deliveries to customers worldwide were down 22.4% in the second quarter of the year, with central and eastern Europe, which included Russia, hardest hit with a drop of 49.3%.

Volkswagen suspended trade and production in Russia in March and recently offered payoffs to employees for quitting voluntarily at one of its sites in the country by the end of the year. A trade union reported earlier this month the site was closing permanently.

While sales in Russia accounted for only around 2% of Volkswagen’s total sales in 2021, the war has caused disruptions across Europe’s car industry from supply chain bottlenecks to inflation impacting deliveries throughout the region.

Volkswagen’s sales in western Europe fell 25.7% in the second quarter, Friday’s data showed, while China and the Americas saw a more moderate drop of around 16-18%.

Battery-electric vehicle (BEV) deliveries increased by just over a quarter to 217,100, making up 5.6% of total sales – bolstered largely by significant growth in China.

While Europe, traditionally Volkswagen’s strongest battery-electric market, saw a 16.5% drop in BEV sales in the second quarter, sales more than doubled in China. [L1N2YW0HU]

In the first half of the year, Volkswagen’s China BEV sales saw a more than three-fold increase from last year to 63,500 units, the company reported.

Still, the carmaker lags far behind local competitors and Tesla in China, selling around five times less than Tesla and 10 times less than domestic EV maker BYD in May.

Speaking to journalists earlier on Wednesday, Volkswagen’s China chief said it “looks promising” for sales of its ID electric vehicles to more than double this year in the country.

The ID.4 far outsold other battery-electric models globally at 66,800 units sold, followed by 26,000 ID.3 vehicles and 24,700 Audi e-tron cars.

(Reporting by Victoria Waldersee, Editing by Miranda Murray, Kirsten Donovan and Tomasz Janowski)