The Albany Gazette - Volkswagen sales slide further as carmaker weighs mass job cuts

Overall vehicle deliveries fell almost nine percent in the April-June period from a year earlier thanks to plunging demand in China, VW said.

Sales had fallen just four percent in the first quarter.

"The situation in China remains challenging, and we were unable to escape a clearly declining overall market," said VW executive Marco Schubert in a statement.

This was "despite initial positive momentum from our newly introduced, locally developed electric vehicles there," he added.

Europe's largest carmaker has come under intense pressure from US tariffs, slimmer profit margins from electric cars and above all intense competition in China, the world's largest auto market.

The 10-brand group, which apart from its namesake also includes marques such as Audi and Porsche, is planning to lay off at least 50,000 in Germany by 2030.

But recent media reports have suggested the firm is targeting cuts of up to 100,000 worldwide as well as the closure of four plants in Germany.

Germany's powerful IG Metall union on Thursday organised protests at VW sites across the country, as management presented their cost-cutting plans to the supervisory board.

There was no major announcement Thursday, with VW simply reiterating previous plans to cut capacity and its model line-up, and analysts said talks would likely take time.

"For now, people are sharpening their swords and firming up their positions," auto analyst Stefan Bratzel of the Centre of Automotive Management told AFP.

"This is going to drag on for months and months."

- Slimming down -

Volkswagen executives have repeatedly stressed the need for the company to slim down as collapsing sales in China have started to look less like a blip and more like a new normal.

It is a crisis hitting the whole German car industry -- BMW said Friday its second-quarter car sales had fallen almost five percent worldwide, dragged down by a 30.2-percent plunge in China.

Chinese brands are also threatening Volkswagen on its home turf.

The likes of Geely, Xpeng and BYD took a nine percent share of the European market in March, according to automotive intelligence firm Dataforce, up from virtually zero three years ago.

"The Chinese are coming to Europe, also building factories which are highly efficient," Volkswagen CEO Oliver Blume warned in April. "We cannot compete with underutilised plants."

But labour representatives and the German state of Lower Saxony -- both of whom take a dim view of possible plant closures -- together hold more than half the seats on VW's supervisory board.

This means any major restructuring is uncertain and will be hard fought.

"Fundamentally, Volkswagen is too big, too complex, too expensive and too slow," auto analyst Bratzel said.

(F.Jackson--TAG)