This Is Why Volkswagen Group Is In Trouble Again

Things are looking dire for Volkswagen Group once again. Sales for the German automotive conglomerate fell 8.6 percent overall in the second quarter of the year, driven down by the company’s abysmal performance in China.  

VW Group sales in the Asian country fell a whopping 36.6 percent from April to June, and they were down 25.9 percent for the year. The automaker also struggled in the Middle East, Africa, and the rest of the Asia-Pacific market. Marcos Schubert, member of VW Group’s extended executive committee for sales, said:  

‘The situation in China remains challenging, where we were unable to escape a significant total market decline of around 20 percent - despite initial positive momentum from our newly introduced, locally developed electric vehicles. Globally, we are seeing a decline in deliveries of around six percent.’

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The drastic decline in sales in these regions could not offset the positives elsewhere. VW Group sales were up 9.4 percent in Latin America over the last three months—and are up 8.3 percent for the year.  

Sales are also up throughout Europe, with the automaker seeing significant gains in Central and Eastern Europe. They are up 6.7 percent for the second quarter and 7.2 percent for the year. Western Europe was more tepid, increasing by 1.8 percent over the quarter. They are up 2.9 percent through the first half.  

How Is VW Group Doing In North America?  

Volkswagen Group sales are on an upswing in North America after a slow start to the year, rising 7.7 percent last quarter. Despite that, sales in the region are still down 3.1 percent for the year. The automaker blamed a “challenging environment” stemming from “the tariff situation” and regulatory changes.

The mainstream Volkswagen brand had a strong quarter in the United States, with sales increasing a stunning 24.9 percent. The German brand sold nearly 90,000 cars in just three months, led by the Tiguan, up 152.5 percent.  

Sales for the Jetta, Golf GTI, and Golf R all increased by 9.7 percent, 17.2 percent, and 12.5 percent, respectively. Volkswagen sold 162,961 cars in the first six months of 2026, about 3,000 more during the same period in 2025. Even sales for the ID. Buzz were up 121.5 percent—from 564 to1,249.  

Shockingly, Porsche sales continue to fall. The automaker sold about 3,000 fewer cars in the second quarter. Nearly every model was down except for the 911, which is up 39.4 percent in the second quarter and up 56.3 percent.  

Audi of America also struggled. Sales dipped 3.0 percent from April to June. The A3, A5, A6, Q5, and Q8 saw their sales increase. For the year, Audi sales are down 17.0 percent.  

What Comes Next For Volkswagen Group?

Yesterday, the automaker announced it would immediately begin downsizing its portfolio. The automaker plans to reduce its lineup by up to 50 percent. The models that survive will have up to 75 percent fewer available options.  

The company plans to focus on “products and technologies that deliver the greatest added value for customers and the highest value contribution to the Group.” It will also reduce its annual production capacity to 9.0 million units. The Group invested in the early 2020s to boost that to 12.0 million vehicles.