Volkswagen's Margin Ambitions Meet a Delivery Slump as Deutsche Bank Keeps the Faith

Deutsche Bank holds its EUR 105 target on Volkswagen, backing the EUR 30 billion cost plan despite a 14.3% Q3 delivery drop and a 38.5% China slide.

Deutsche Bank is sticking with its buy rating on Volkswagen, even as the group's third-quarter delivery figures lay bare how much ground the carmaker still has to make up. The bank's analysts see a clearer route to higher margins following the transformation programme presented at the Paris Motor Show — but the sales data published a day earlier show the road is anything but smooth.

A EUR 30 Billion Cost Programme With a 2027 Anchor

At the heart of the plan sits roughly EUR 30 billion in cost savings targeted by 2030, with a substantial portion scheduled to land as early as 2027. That gives the overhaul a waypoint well before the end of the decade. Analyst Tim Rokossa rates the outlined path as more defined, arguing that cost reductions are gathering momentum while the company simultaneously simplifies its vehicle platforms. The positive assessment therefore rests less on new model launches than on the economic execution of the restructuring.

Management is chasing a group margin of 8–10% by 2030, and Deutsche Bank has left its EUR 105 price target untouched. Hitting a 9% margin, however, presupposes annual sales of 9 million vehicles alongside delivery of the savings — volume and profitability cannot be viewed in isolation under that arithmetic.

Deliveries Retreat at the Fastest Pace Since 2022

The scale of the challenge is visible in the numbers. Volkswagen shipped 1.885 million vehicles worldwide in the third quarter of 2026, a drop of 14.3% from the same period a year earlier. According to Reuters, that marks the steepest quarterly decline since spring 2022. Across the first nine months, deliveries fell 9.0% year on year to 6.011 million units — below the corridor the group has guided for the full year, which envisages a decline of between 3% and 7%.

Reaching even the lower end of that range would require more than 2.3 million deliveries in the final quarter, according to calculations by the Börsen-Zeitung. Simply stabilising at the recent quarterly level would not be enough; a pronounced pickup is needed, and several key regions were still losing ground last quarter.

China's Steep Slide Spreads Across the Brand Portfolio

China weighs heaviest. Deliveries there tumbled 38.5% in the third quarter to 405,800 vehicles, with the nine-month figure down 30.2%. Volkswagen has described the sharp contraction of the broader Chinese market, citing Reuters, as an industry-wide challenge. The pressure is not confined to Asia, though: North America and Western Europe also recorded lower deliveries in the most recent quarter.

Within the group, the weakness cut across several major passenger-car brands. Volkswagen Passenger Cars shed 19.3% in the third quarter, Audi 19.7% and Porsche 15%. Škoda held its deliveries steady, while the truck division Traton expanded — evidence that fortunes inside the conglomerate are far from uniform. Those pockets of growth were not enough to offset the global decline.

Europe's EV Order Book Offers a Partial Counterweight

Europe's electric business provides some relief. Fully electric deliveries rose 12.1% between January and September to 586,100 vehicles, taking a 20% share of European deliveries. The order book tells an even stronger story: Volkswagen says its European EV backlog has doubled compared with the end of 2025, with battery-electric models accounting for roughly 40% of that pipeline. The Electric Urban Car Family alone has amassed close to 150,000 orders.

Yet the global picture for EVs remains one of contraction, so Europe's expansion is a regional prop rather than a group-wide counterbalance. There is a margin complication too. Small electric cars in Europe are beating order expectations, but they dilute profitability — meaning stronger demand does not automatically translate into higher returns for Volkswagen.

Product Offensive Runs in Parallel With the Cost Drive

The product push continues regardless. At the Paris Motor Show, Volkswagen opened pre-orders for the ID. Tiguan, an electric SUV built in Emden that is slated to replace the ID.4 and ID.5 when it launches in early 2027. Of the 20 market launches planned for China in 2026, 15 have already been rolled out — a sign of momentum in the model offensive, though not on its own proof that the margin target is within reach. Volkswagen says its locally developed Chinese models outperform vehicles engineered for the global market, and Deutsche Bank sees China increasingly evolving into an innovation and export hub where the group leans on partnerships.

The strategy therefore couples two tasks: renewing the lineup while reshaping the cost base. New products can improve the volume prerequisites; whether they lift returns depends just as much on how economically the group develops and builds them. That is precisely why the planned savings carry weight — they are meant to accompany the economic transformation as the sales mix shifts, at a time when EVs still earn Volkswagen less than combustion-engine cars.

What the October Print Will Reveal

The stock added 0.4% on the day, trading at EUR 68.66, so the upbeat analyst verdict has so far translated into only a modest gain. Attention now turns to the third-quarter results, due on 29 October, when analysts expect earnings per share of EUR 5.26 on revenue of roughly EUR 79 billion. That report will shift the focus from unit volumes to their financial impact. For investors, the test of the transformation plan lies in the combination of sales and returns: Deutsche Bank sees a more tangible path forward, but whether Volkswagen walks it still hinges on cost execution and the profitability of its new models.