Volkswagen's Europe and US sales offset China weakness in Q3

By Christoph Steitz

FRANKFURT (Reuters) -Volkswagen's group deliveries rose 7.4% in the third quarter as strong demand in Europe and North America offset a decline in top market China, the German carmaker said on Friday.

The Volkswagen group delivered 2.34 million vehicles in total in July-September. In China, deliveries fell 5.8% to 837,200, the company said, joining rival German carmakers in reporting a quarterly decline there.

Mercedes-Benz and BMW earlier this week said their third-quarter sales in China fell, with the former hit by supply chain issues and model changes.

China has been a tough market for automakers, which have battled weakening demand there as well as fierce price competition that Mercedes-Benz Chief Executive Ola Kaellenius last month described as "Darwinistic".

Still, car sales in China continued a recovery in September, rising for the second consecutive month, benefiting from stronger demand and new models ahead of key holidays.

Volkswagen recorded a 40.5% increase in deliveries of all-electric vehicles to 209,900 in the third quarter, accounting for 9% of group deliveries.

"Despite the current general reluctance in the European market to buy battery-powered vehicles, we gained market share and remained market leader in this segment," said Hildegard Wortmann, a member of Volkswagen's extended executive committee.

"However, our order intake is below our ambitious targets due to the lower than expected overall market trend."

Lower-than-expected demand for electric cars has caused Volkswagen to terminate its three-shift approach at its Zwickau plant in eastern Germany.

(Reporting by Christoph Steitz and Tristan Chabba, Editing by Rachel More and Mark Potter)