Volkswagen reports 7% drop in Q3 deliveries

Volkswagen Group reported a 7% fall in third-quarter global deliveries.

It was yet another example of how Europe's car industry faces tough challenges, including weak demand from China and high production costs at home.

Europe's car companies also face a potential trade war between the European Union and Beijing.

The EU has agreed to move forward with import tariffs on Chinese-made electric vehicles due to alleged subsidies.

Volkswagen is currently undergoing a major revamp.

It is considering whether to close some German plants for the first time due to weak European demand and Chinese competition.

The auto giant also cites the challenges of vehicle electrification, and high costs in Germany for the potential closures.

Volkswagen's deliveries to the world's biggest car market, China, fell 15% in Q3.

This dragged down the global figure to a little under 2.18 million vehicles.

Rating agency Moody's has cut its outlook on Volkswagen to "negative" from "stable," citing a deteriorating operating performance at Europe's top carmaker and expected challenges to turn the situation around.

"We expect Volkswagen's operating performance to be muted into 2025 driven by low volume growth globally including a weak domestic China and sluggish Western Europe, increasing price pressure, potential fines on EU CO2 emissions, as well as additional restructuring costs," Moody's said.

The automaker has cut its annual outlook for a second time in less than three months.

It also expects to deliver around 9 million cars this year, representing an annual decline.

Fellow German rivals BMW and Mercedes also said third quarter sales were hit by sluggish demand and Chinese competition.