Volkswagen Group lost more than a third of its China sales last quarter. That single number—down 36.6 percent from April through June—explains nearly everything the company has done in the past week, from announcing it will kill up to half its model lineup to slashing annual production capacity by three million units.
The Q2 results paint a company being pulled in two directions. In China, VW Group is in freefall. For the first half of 2026, sales in the country are down 25.9 percent, a hemorrhage that no amount of good news elsewhere can stanch.
The Middle East, Africa, and broader Asia-Pacific markets aren’t helping either. Marcos Schubert, a member of VW Group’s extended executive committee for sales, tried to contextualize the damage, noting the Chinese total market itself declined around 20 percent. But losing ground faster than a shrinking market is not a defense. It’s a diagnosis.
The bitter irony is that VW Group is actually growing in most of the rest of the world. Latin America was up 9.4 percent for the quarter. Central and Eastern Europe jumped 6.7 percent.
Even North America climbed 7.7 percent after a sluggish start, with the mainstream VW brand posting a 24.9 percent gain in the U.S. alone. The Tiguan was the star, surging 152.5 percent. The ID. Buzz more than doubled its volume, albeit from a painfully low base—564 units to 1,249.
The Jetta, GTI, and Golf R all posted healthy gains. VW sold 162,961 cars in the U.S. through June, edging ahead of 2025’s pace by roughly 3,000 units.
But inside VW Group’s luxury brands, the rot is spreading. Porsche moved about 3,000 fewer cars in Q2 than a year ago. Nearly every nameplate declined except the 911, which surged 39.4 percent for the quarter and 56.3 percent year-to-date—a telling sign that Porsche’s core buyers still want the iconic sports car but are walking away from the rest.
Audi of America fared little better, with Q2 sales down 3.0 percent and first-half volume cratering 17.0 percent.
Add it all up and VW Group deliveries fell 8.6 percent globally for the quarter and 6.3 percent for the year. That’s the math behind the knife the company took to its portfolio this week. Up to 50 percent of models will be eliminated.
Surviving nameplates will lose up to 75 percent of their available options. Annual production capacity drops from a planned 12 million units to 9 million—an admission that investments made in the early 2020s were built on assumptions the market has already rejected.
The company says it will focus on products and technologies that deliver the greatest added value for customers and the highest value contribution to the Group. Strip away the corporate language and you get a simpler translation: VW Group built too many things that too few people wanted to buy.
Rumors persist that the restructuring could extend to closing four plants and cutting 100,000 jobs. VW hasn’t confirmed those figures, but nothing in these sales numbers suggests the cuts will be modest.
China was supposed to be VW Group’s growth engine for the decade. Instead, it became the anchor. Domestic Chinese competitors, particularly in electric vehicles, have eaten into VW’s market share with ferocity.
Schubert acknowledged “initial positive momentum” from locally developed EVs, but momentum and market share are different currencies. The VW brand itself is healthy in America and holding steady in Europe. That’s real.
But a conglomerate carrying Porsche, Audi, Lamborghini, Bentley, SEAT, Škoda, and Cupra cannot restructure its way to health on the strength of Tiguan sales in Texas. The portfolio surgery announced this week is an admission that the empire grew too large for the demand that remains.
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