09-07-2025
- Automotive
- Malaysian Reserve
VW luxury brand sales drop as US tariffs hit European cars
VOLKWAGEN AG sold fewer of its most profitable cars in the second quarter as US tariffs cut into deliveries of premium European brands.
Sales of Porsche, Audi, Lamborghini and Bentley vehicles declined 7.7% to 480,200 units in the three months through June, highlighting the strain President Donald Trump's duties are putting on VW's high-margin marques.
The tariff pain is being felt beyond the premium brands. VW's group sales dropped 16% in the US during the second quarter, a sharp reversal from the 4.4% growth in the first three months of the year, before the new levies came into effect.
Europe's carmakers are also ceding ground in China, where domestic electric-vehicle makers like BYD Co. are dominating. VW's EV sales there plummeted by nearly a third in the second quarter.
VW isn't alone. Mercedes-Benz Group AG on Monday reported a 10% decline in second-quarter sales, also attributing the drop to reduced deliveries in both the US and China following the introduction of tariffs.
Despite the headwinds, VW still managed to grow total vehicle sales in the second quarter, supported by strong performances at its lower-margin VW and Skoda brands. Global deliveries rose 1.2% year-on-year to 2,271,700 vehicles, with notable gains in Central and Eastern Europe, South America, and the Middle East and Africa. In China, non-electric sales offset the drop in EV deliveries, leading to an overall 2.8% increase.
VW is also making progress on EV sales in Europe, with a 73% rise in deliveries in the quarter.
These shifting regional dynamics are beginning to weigh heavily on earnings. Volkswagen saw profit slump 40% in the first quarter, and the growing reliance on lower-margin brands to prop up sales suggests further pressure on the company's bottom line in the quarters ahead. –BLOOMBERG
