VW's China Collapse Pushes Blume Toward a Tougher Trade Stance

Volkswagen CEO Oliver Blume has publicly backed stronger EU safeguards against Chinese automakers, a notable pivot from the cautious line Germany’s car industry has held for years. Speaking in Paris at the group’s “For Europe” event, staged just ahead of the city’s motor show and only days before an EU summit on China trade, Blume threw his weight behind the European Commission’s “Made in Europe” push. He framed the position carefully, insisting the goal is industrial policy shaped by European interests rather than raw protectionism, while arguing that anyone selling in Europe should compete under comparable conditions and contribute jobs and value on the continent. He shared the platform with French Industry Minister Sébastien Martin, a long-time advocate of firmer trade defence, who said the moment had come for France and Germany to act together.

The hard numbers explain the change of heart. Volkswagen’s third-quarter deliveries came to 1.89 million vehicles, down 14.3% year over year, following a 4% decline in the first quarter and an 8.6% drop in the second. China was the sharpest wound: deliveries there tumbled 38.5% to roughly 406,000 units, pushing the nine-month decline to 30.2%. Group sales chief Martin Sander attributed the slide to a broadly contracting Chinese market. For years Berlin resisted tougher measures largely out of fear that Beijing would retaliate against German automakers’ Chinese operations. With those volumes eroding and no realistic expectation of recovering former levels, the price of confrontation has fallen while the pressure at home has grown.

That pressure is visible in market share. Chinese brands accounted for 13.5% of German EV sales in September and claimed more than a quarter of Western Europe’s plug-in hybrid segment in the second quarter — up sharply from just 2.2% two years earlier. Martin pointed to French tariffs on Chinese electric cars as proof that action works, citing a drop in Chinese automakers’ share in France from 40% to 11%. Europe has increasingly become Volkswagen’s anchor: battery-electric models made up about one in five of its 2.96 million European deliveries over the first nine months, EV orders climbed by more than half in the third quarter, and electric models now represent 40% of the order backlog. The Electric Urban Car Family — comprising the ID. Polo, ID. Cross, Škoda Epiq and Cupra Raval — has accumulated nearly 150,000 orders with more than 80% shared components.

Yet Volkswagen’s own supply chain only partially satisfies the standard Blume is setting for rivals. The group depends on Chinese batteries, its Chinese partner Gotion is expanding its role in European battery plants, and the hybrid quota recently agreed with Beijing counts China-built hybrids from European brands alongside those of Chinese manufacturers. Defining “European” by where value is created therefore cuts both ways for Wolfsburg.

Blume’s stance is also landing badly inside his own company. Volkswagen has walked back a former collective bargaining agreement in a drive to cut another 50,000 positions — about half of them in Germany — for a cumulative 100,000. Ten agreements have so far been terminated, and the futures of the Emden, Hanover, Zwickau and Audi’s Neckarsulm sites remain unresolved. Works Council head Daniela Cavallo reacted sharply after Blume floated the idea of trimming holiday entitlement. The shift matters because it removes German industry’s central objection to EU trade protection — and recent action on hybrid quotas shows how quickly Brussels can move once that brake is gone. Still, protection can only steer more of the cars sold in Europe toward European factories; it cannot guarantee they will be built in German ones.