Volkswagen's Transformation Plan Stalls as Board Revolt Collides with China Sales Rout

Volkswagen CEO Oliver Blume's restructuring plan blocked by board as China Q2 sales collapse 36.6%; stock down 33% YTD, near 52-week low, RSI oversold at 30.2.

Oliver Blume’s blueprint for a leaner Volkswagen ran headlong into a wall at the hands of the supervisory board on Thursday, and the very next day the company reported a second-quarter sales collapse in China that leaves the CEO fighting for his restructuring agenda on two fronts. The preferred stock closed XETRA trading at €71.06 on Friday, a 1.31% decline that erased whatever hope remained after the boardroom debacle.

The so-called "Zukunftsplan 2030" envisioned closing German plants and cutting up to 100,000 jobs to restore the group’s competitiveness. But only seven of the 19 supervisory board members present backed the proposal. The state of Lower Saxony, Volkswagen’s second-largest shareholder, sided with labour representatives to block the cost-cutting drive, leaving Blume without the majority he needed to press ahead.

That political paralysis came as the company released preliminary delivery data showing group-wide vehicle sales dipped 8.6% in the second quarter to 2.08 million units. The Chinese market — once Volkswagen’s growth engine — suffered a far deeper contraction of 36.6%, falling to just 424,300 vehicles. The slump was partially cushioned by gains of 1.8% in Western Europe and 7.7% in North America, but those regions cannot offset the scale of the Chinese downturn.

The pain is spreading across the group’s premium brands. Audi reported a 7% decline in first-half global deliveries, while Porsche saw a 16% drop to 122,306 vehicles. Intensifying competition from Chinese manufacturers and US tariffs are weighing on both marques, compounding the headwinds facing the core VW brand.

Analyst reaction to the twin blows has been mixed. Jefferies reiterated a "Buy" rating with a €120 target, though analyst Philippe Houchois noted that Blume’s restructuring plan lacked substantive detail on plant closures, the five-year investment blueprint, or the mechanism for trimming the workforce by 100,000. JPMorgan struck a more cautious "Neutral" tone, with analyst Jose Asumendi expecting further capacity cuts in Europe, a sharper focus on profitable segments, and steps to defend the group’s technological edge — all of which now look less certain given the board’s intransigence.

The market is not waiting for clarity. The shares have lost 33.03% since the start of the year, and the 52-week low of €69.20, hit just on 1 July, is now only 2.69% below the current price. The 30-day decline stands at 17.85%, and the stock is trading 24.22% below its 200-day moving average of €93.78 — a stark signal that the downtrend has entrenched itself. The relative strength index reads 30.2, brushing the threshold for oversold territory, which could offer a technical bounce if no fresh bad news lands on Monday.

Automotive expert Ferdinand Dudenhöffer added to the tension over the weekend, calling in the Neue Osnabrücker Zeitung for a return to the 40-hour week without pay compensation. His argument: German factories must slash production costs or watch the country’s industrial competitiveness erode further.

Three events in the coming days will test whether the stock can hold support at €69.20. On Monday morning Volkswagen hosts a first-half pre-close conference call, where analysts will probe the delivery shortfall and any updated margin guidance. The official half-year report is due on 24 July. Meanwhile, possible new EU tariffs on Chinese electric vehicles could invite retaliation from Beijing, directly threatening Volkswagen’s most critical market.

The company’s market capitalisation now stands at €34.72 billion. If the €69.20 floor gives way, the next downside target becomes the €60 level. Until the board deadlock breaks — or China stabilises — the shares remain caught between deteriorating fundamentals and the hope of a strategic resolution.