The pain was most acute in the world’s two biggest auto markets. Shipments dropped by 15% in China and about a fifth in the US, with electric-vehicle sales particularly hard hit in both regions. Gains of 4.2% in Western Europe and 7% in South America offered only partial relief.
The figures add to growing evidence that European carmakers are losing ground in China. Mercedes-Benz Group AG last week reported a 27% sales slump there in the first quarter, an even steeper drop than in the previous period.For Volkswagen, the pressure is especially intense. Domestic manufacturers such as BYD Co. and Geely Automobile Holdings Ltd. are churning out increasingly sophisticated models at aggressive prices, eroding VW’s long-held advantage. Skoda is preparing to exit China as buyers pivot toward locally made EVs, with Porsche suffering due to muted luxury spending.
To sharpen its competitiveness and offer models that better fit local tastes, Volkswagen is working with Chinese manufacturers including Xpeng Inc. Its Audi brand has teamed up with SAIC Motor Corp. to develop electric vehicles on a platform for China.
