June sees falling sales for Volkswagen brand on China, Latin America woes image

The Volkswagen namesake brand registered an 8.6 percent delivery drop in June for the eighth month of negative results during the past nine, with China’s growth creeping almost to a halt and Latin America weighing on the increases registered at home in Europe.

The VW brand, which makes up around 60 percent of the sales of the entire group, slumped 8.6 percent year-on-year to 470,700 autos, with the six-month tally now down 3.9 percent, according to a statement from Wolfsburg-based VW. The only positive result registered by the company was in February, when sales were actually level at 413,700 units and the VW AG division – the largest in terms of sales and profit – has registered dropping sales since last October. After the first six months of the year, regional demand has increased 3.1 percent in Europe and 3.2 percent in North America – but that was not enough to offset the massive Chinese market, where VW usually sells around a third of last year’s record-breaking group result of 10.1 million vehicles. “The Chinese market is changing,” commented the group’s sales boss Christian Klingler. “As the market leader we cannot escape the development of the market.”

The main VW brand was one of the key points of debate because of sliding profit margins and deep cost issues between former Chairman Ferdinand Piech and chief executive officer Martin Winterkorn this spring, according to sources. The latter last year presented a plan to reign down on expenses by 5 billion euros ($5.4 billion) annually. Since the start of the month, VW also has a new brand chief – former BMW executive Herbert Diess.

Via Reuters