The German parent of brands including Audi, Skoda and Porsche delivered 9.03 million vehicles globally, 2.3% fewer than in 2023.
Sales of its fully EV declined in both Europe and the US.
VW has been hit hard by intensifying competition in China from local manufacturers led by BYD Co, as well as reduced EV subsidies in Europe.
CEO Oliver Blume has struggled to push through cost savings, particularly at the company’s namesake brand, where management and unions were locked in negotiations for months last year before agreeing on wide reaching measures to reduce capacity.
To boost sales, Blume will be looking to new technology partnerships with China’s Xpeng Inc and US startup Rivian Automotive Inc.
Even so, this year could prove difficult due to the threat of US tariffs, signs of persistent economic malaise in China and high living costs across Europe.
In 2024, the issues led to a wave of profit warnings, including from Volkswagen, Mercedes-Benz Group AG and BMW AG.
It’s been a tough year in general for the German auto industry.
Mercedes’ sales dipped 3% on weaker demand for its most expensive models in China and a drop in EV sales in Europe.
BMW’s deliveries slipped 4% amid parts issues, while Porsche sales declined 3%, led by a 28% slump in China.
Volkswagen’s issues are starkest in China, where overall deliveries fell 9.5% to 2.93 million last year.
China “continues to be characterised by a fierce price war between more than 120 competitors,” Volkswagen said today, adding that it aims to sell 4 million vehicles annually in the world’s biggest auto market by 2030.
In the US, where President-elect Donald Trump has threatened higher tariffs, VW doesn’t offer pickup trucks favoured by local drivers.
While the group’s North America sales increased 6.4% last year, deliveries of its fully electric cars in the US slumped around 30%.
Both Porsche and Mercedes experienced a pickup in demand in the fourth quarter, fueling hopes that 2024 was a low point for Germany’s embattled automakers.
Volkswagen said it’s seeing encouraging order intake for EVs in Western Europe, citing demand for new models including the VW ID.7, the Audi Q6 e-tron and the Porsche Macan.