Volkswagen to halve model range amid China sales slump

Volkswagen Group announced on Thursday, July 9, 2026, that it will slash its model lineup by as much as half, a dramatic move prompted by a deepening sales crisis in China and intensifying global competition. The German automaker, Europe's largest, reported that its overall vehicle deliveries fell almost nine percent in the second quarter compared to a year earlier, accelerating from a four percent decline in the first three months of the year. Executives attributed the worsening performance primarily to plunging demand in China, the world's largest car market, where sales have dropped by a third compared to 2019 levels.

The company faces a fundamental challenge: its historic strength in gasoline-powered vehicles is rapidly losing relevance in a global market shifting toward electrification. While Volkswagen's share of China's shrinking gasoline car market has increased slightly, more than three out of five new cars sold in China are now fully electric or plug-in hybrids. The automaker has lagged behind Chinese competitors like BYD, Geely, and Tesla in the transition to electric vehicles and in adopting advanced software and user-friendly electronic features. Industry-wide...