Volkswagen faces a challenging outlook for global sales in 2024

2024 has not been an easy year for Volkswagen, since their worldwide sales have reflected a slight drop compared to those recorded in 2023. The German brand, which delivered 4,8 million vehicles Globally, it suffered a decrease of 1,4% in its sales figures, with the Chinese market standing out in particular as the main cause for concern. This country, which represents a key market for the European manufacturer, recorded a drop in sales of 8,3%, reaching only 2,2 million units sold.

El Global market faces unique challenges with a combination of macroeconomic and political factors affecting Volkswagen's ability to retain and grow in several areas of the globe. According to Martin Sander, Head of Sales and Marketing for the Group, 2024 was particularly complicated due to a sluggish economy and intensifying competition, especially in the electric vehicle and SUV sector.

Volkswagen plans to cut jobs and restructure…

As part of its plan to face an increasingly competitive market, Volkswagen has announced a major adjustment plan that includes the elimination of 35.000 jobs in Germany until 2030. This drastic move, which will not involve plant closures or forced layoffs, seeks optimize the cost structure of the group and respond to the current challenges of the automotive sector. The decision is part of an agreement with the IG Metall union made in December 2024.

The segment of Power Plants has been another difficult front for Volkswagen. Despite the fact that the company has been investing heavily in this area, sales of electric cars decreased by 2,8%, barely reaching 383.100 units during 2024. This figure underlines the difficulties of competing with brands such as Tesla or Chinese manufacturers, who have gained considerable ground in this sector with more competitive prices and a most advanced technology.

Rising markets and potential opportunities

It's not all bad news for Volkswagen. While the markets in Europe and Asia performed poorly, sales in the North America y South America have been increasing, with a growth of 18,4% and 21,10% respectively. This shows that there are still opportunities for expansion for the brand in markets where the SUVs and SUVs are highly valued. In fact, almost all 47% of vehicles purchased in 2024 were of this type of model, with the Tiguan and T-Roc leading the brand's global sales.

However, the loss of market share facing local and emerging manufacturers has been a constant in key areas such as China. Chinese houses such as BYD Geely has not only surpassed Volkswagen in electric sales, but has also achieved mass acceptance due to local government incentives since they have developed strategies of very aggressive prices with which to "buy their market share."

The impact of competition and future challenges

The global automobile market is undergoing a radical transformation. Competition in the segment of Power Plants, in particular, is reaching unprecedented levels. According to recent data, companies such as BYD and Tesla are consolidating themselves as leaders in the sector, while Volkswagen is struggling to maintain its share. BYD, for example, has reported massive sales of its electric and plug-in hybrid models, reflecting a shift in global consumer preferences towards more sustainable options.

Despite all the efforts and investment in electrification technologyVolkswagen appears to be struggling to match its rivals in terms of innovation and efficiency on the production line. In addition, increasing pressure to meet strict emissions standards such as those set by the European Union's CAFE regulations poses an additional challenge for the German group. Looking to 2025 and beyondVolkswagen will have to redouble its efforts to remain competitive in the global race towards electrification.

This will likely include strategic alliances, cost optimization and further innovation in its electric model range. The expansion of electric charging points and the development of More cost-effective and longer-lasting batteries will be key factors on this path towards greater sustainability. 2024 has been a year full of lessons and complex realities for Volkswagen that will not be left behind in the newly launched year 2025. However, we cannot ignore that of the ID.3 They have sold 500 thousand units since he was born. Quite a milestone…

Source - Volkswagen

Images | Volkswagen