Volkswagen expects single-digit sales decline in China this year

Volkswagen AG said on Friday it expects its China sales to fall a single-digit percent this year as new sport-utility vehicles and premium models help it recover from a sales slide in the world's biggest auto market.

The German automaker sold 1.59 million vehicles in China in the first six months of 2020, down 17% from 1.92 million units in the same period last year. For all of 2019, Volkswagen sold around 4.23 million vehicles in the country.

Volkswagen is China's biggest foreign automaker, followed by US rival General Motors Co.

The country's overall auto sales, which include passenger cars and commercial vehicles, dropped 17% in January-June. The China Association of Automobile Manufacturers has forecast full-year sales to fall 10% to 20%.

Volkswagen China chief Stephan Woellenstein said the automaker's sales in the second half this year will likely be level with same period last year, though a possible second wave of the novel coronavirus outbreak lends uncertainty.

The firm expects the market's sales of new energy vehicles, which include all-battery vehicles as well as plug-in hybrid and hydrogen fuel-cell vehicles, will reach 1 million units this year, Woellenstein said at a briefing.

The Wolfsburg-based company has local joint ventures with SAIC Motor Corp Ltd, China FAW Group Corp Ltd and Anhui Jianghuai Automobile Group Corp Ltd (JAC), and is building plants based on its MEB platform which it has said enables the efficient production of various electric vehicle models.

Volkswagen said it would invest 2.1 billion euros ($2.39 billion) in partner JAC and battery maker Guoxuan High-tech Co Ltd.

Woellenstein said by 2025 Volkswagen plans to have 15 MEB-based electric models of different brands in China. It is building its own electric vehicle charging infrastructure in Chinese cities.

Volkswagen, which also sells premium Audi cars in China, expects slight growth in China's premium car segment this year. A document seen by Reuters showed it plans to revamp plants with SAIC to make new Audi sedans.