German automakers start 2026 with broad sales decline as China slowdown and EV transition weigh
German automakers report weaker Q1 2026 deliveries as BMW, Volkswagen and Mercedes-Benz cite China shortfalls and falling EV shipments and supply issues.
The German automakers began 2026 with a noticeable downturn in global deliveries, driven in part by a sharp slowdown in China and a pullback in electric vehicle shipments. BMW, Volkswagen Group and Mercedes‑Benz each reported lower first‑quarter volumes, with regional differences leaving Europe and the United States as lone bright spots. Manufacturers and executives pointed to market contraction, intensifying competition and product transition effects as the main headwinds.
BMW posts 3.5% drop in Q1 deliveries
BMW Group said it delivered 565,748 cars worldwide in the first quarter, a decline of 3.5% year‑on‑year. The figure includes the BMW core brand as well as Mini and Rolls‑Royce units. Company executives flagged China as the key driver of the shortfall.
The automaker reported a 10% fall in China to about 144,000 vehicles, while deliveries in the United States slipped roughly 4.3% to around 90,000. Germany and broader Europe bucked the trend, with domestic sales up 10.7% to 68,000 and European deliveries rising about 3% to roughly 236,000 cars.
Electric vehicle shipments fall amid model transition
BMW’s electric vehicle deliveries dropped sharply, falling about 20% to 87,500 units in the quarter. The company attributed part of that decline to the introduction of its new electric platform, the “Neue Klasse,” which has generated substantial orders but limited immediate deliveries. BMW sales chief Jochen Goller said the Neue Klasse received “significantly more than 50,000 orders since launch in Europe,” underscoring demand that has not yet fully translated into completed shipments.
Analysts and company statements point to a lag between intake of new EV orders and the production ramp‑up for next‑generation models, a dynamic that can depress short‑term delivery figures even as underlying demand strengthens.
VW Group posts 4% drop; Porsche sees largest fall
The Volkswagen Group reported a roughly 4% decline across the group, delivering 2.05 million vehicles in the first quarter. Group executives said the global market contracted through March but maintained that the company’s overall market share was broadly stable compared with the prior year. Audi and Porsche both recorded steeper declines within the group.
Volkswagen’s core brand was hit harder because of its greater exposure to China, with deliveries down 7.6% to about 1.05 million units. Audi deliveries fell approximately 6.1% to 360,000 vehicles, while Porsche experienced the steepest drop among the brands, decreasing nearly 14.7% to just under 61,000 sports and SUV deliveries.
China and North America weaken, Europe posts gains
China proved the most acute area of weakness for several German manufacturers. The VW Group said deliveries in China were down by almost 15% to about 548,700 cars, while Mercedes‑Benz and BMW each reported double‑digit contractions in the market. North America also softened, with Volkswagen’s North American deliveries falling more than 13% to roughly 205,500; the U.S. market for VW alone declined by about 20.5%.
By contrast, Western Europe and Germany showed growth across multiple brands. Volkswagen reported nearly 850,000 deliveries in Western Europe, up around 4.2%, and domestic German deliveries rose about 4.8%. Mercedes‑Benz also recorded gains in Europe and the United States, which partly offset its China losses.
Mercedes‑Benz down 6% overall despite regional strength
Mercedes‑Benz Group reported sales of 499,700 passenger cars and vans in the quarter, a decline of about 6% from the prior year. The company said its passenger car deliveries totaled 419,400 units, with the drop driven mainly by China, where volumes fell roughly 27% to 111,600 cars. Without the China effect, Mercedes noted the passenger car segment would have grown modestly.
The Stuttgart manufacturer registered solid gains in the United States, where deliveries increased about 20% to 81,100 units, and in Europe, where volumes rose roughly 7% to 158,400 vehicles. Domestic German deliveries climbed nearly 9% to 49,300, highlighting the uneven regional profile affecting headline performance.
Market drivers: competition, tariffs and model cycles
Executives across the industry pointed to a combination of factors behind the downturn: fierce competition in China, changing trade and tariff dynamics, and the normal disruption that accompanies major product transitions. Volkswagen executives cited market contraction and competitor pressure in China, while observers noted that tariff policies and shifting demand patterns in North America also weighed on volumes. The overlap of slowing demand in some regions with intensive investment in new electric platforms is creating short‑term volatility in reported deliveries.
Automakers stressed that order books for new electric models remain robust even as deliveries lag, suggesting potential for recovery as factories ramp up production and supply constraints ease. For now, however, the first quarter results underline how vulnerable global volumes remain to regional shifts and the timing of model introductions.
The mixed regional picture and ongoing EV transition mean German automakers will be closely watched in the coming quarters as they move to convert strong order volumes into steady deliveries and navigate competitive pressures in their largest overseas markets.
