VW Under Pressure As China Sales Fall, Audi Falters

Volkswagen shares slipped after an overnight profit warning triggered partly by the potential closure of an Audi plant and a 3.8% drop in second-quarter sales, particularly in China.

The company adjusted its 2024 operating return on sales forecast to 6.5-7% from 7-7.5% and indicated that the Audi brand might close its Brussels site. I Photo: Audi

Victoria Waldersee and Christina Amann reported for Reuters that deliveries in China were down nearly 20%, impacted by the declining sales of combustion engine cars, which still constitute the majority of Volkswagen's offerings in the country.

As China rapidly transitions to an all-electric market, Volkswagen has committed to increasing its battery-powered vehicle offerings in the coming years, prioritizing profitability even as local rivals slash prices by up to 50%. "We do not expect an easy year," a spokesperson stated.

The company adjusted its 2024 operating return on sales forecast to 6.5-7% from 7-7.5% and indicated that the Audi brand might close its Brussels site, which employs about 3,000 people, due to low demand for higher-end electric cars.

Volkswagen shares were down 1.13% at 105.4 euros at 1030 GMT, contributing to a 5.5% decline so far this year.