Audi said its worldwide deliveries fell 7% year-on-year for the first half of the year, citing a more competitive landscape in China and the impact of U.S. tariffs on demand.
In its breakdown, Audi reported deliveries in China were down by nearly a fifth during the January-to-June period, while shipments to North America declined by roughly 17%. The company noted that China remains a challenging and intensely competitive market, pointing to pricing pressure, higher fuel costs and alterations to subsidy policies as contributing factors.
Volkswagen Group, which fully owns Audi, released its own quarterly performance on the same day. The group reported an 8.6% fall in global deliveries for the second quarter. The drop was concentrated in China, where deliveries plunged 36.6% in the quarter. By contrast, the group recorded increases in North America and Western Europe, with deliveries up 7.7% and 1.8% respectively. Volkswagen's shares slipped about 1% on the news.
Management has responded to the weaker demand backdrop with an intensified cost-reduction agenda. Volkswagen outlined plans to pare down its model range gradually by as much as 50%, concentrating resources on its most attractive segments while scaling manufacturing capacity to better reflect prevailing demand levels.
The restructuring plan presented to the supervisory board builds on an earlier agreement with the company’s major labor union. That prior accord secured substantial cost savings and set out 35,000 job reductions in Germany by the end of the decade, while excluding immediate plant closures. The latest measures will be accompanied by further workforce adjustments, with an additional 15,000 positions being eliminated across Audi, Porsche and Volkswagen’s Cariad software unit.
Volkswagen has warned that the coming years will be decisive for the group. Management said it needs to identify further savings beyond previous plans as it prepares for weaker delivery volumes and a persistent shift toward greater market volatility.
With deliveries falling in key markets and the group moving to shrink its model portfolio and manufacturing footprint, investors and industry observers will be watching execution of the cost program and how capacity is realigned to the softer demand environment.