By Brazil Stock Guide – Volkswagen Group reported a 4% decline in global deliveries in the first quarter of 2026, but strong growth in Brazil and broader South America helped cushion the impact of sharp drops in China and the U.S., highlighting a widening regional divergence in the global auto market.
Brazil strength
Brazil stood out as a rare growth pocket. Deliveries in the country rose 14.4% in the quarter, driving a 7% increase across South America. The performance reflects resilient domestic demand and solid positioning for Volkswagen in the region, which is once again acting as a cyclical buffer for global automakers amid a softer international backdrop.
Still, the region’s contribution remains limited in scale. South America accounted for roughly 147,900 vehicles out of the group’s 2.05 million global deliveries, meaning strong growth locally is not enough to offset weakness in larger and more strategic markets.
Core markets drag
The main pressure continues to come from China and North America. Deliveries in China fell 14.8%, while North America declined 13.3%, including a 20.5% drop in the U.S., as tariffs and regulatory changes weighed on demand.
Despite the volume decline, Volkswagen said it largely maintained its global market share, suggesting the slowdown reflects broader industry conditions rather than company-specific losses.
The shift is even more pronounced in electric vehicles. Global BEV deliveries fell 7.7% to 200,000 units, but the regional split was stark. Europe continued to expand, with BEV deliveries rising 11.5% and penetration increasing, while China and the U.S. saw sharp contractions of 63.8% and 80.1%, respectively.
The company attributed part of the decline to the expiration of subsidy programs and, in the U.S., the additional impact of tariffs introduced in 2025. The result reinforces a more fragmented EV transition, with Europe remaining the core growth engine while other regions reset demand dynamics.
Looking ahead, Volkswagen pointed to a 15% increase in its European order book compared with the end of 2025, supported by new model launches across combustion, hybrid and electric segments. Total order intake rose 3%, with BEV orders up 4%, suggesting demand remains intact despite the current delivery slowdown.
Plug-in hybrids also gained traction, with deliveries rising about 31% year-over-year, indicating that consumers may be favoring transitional technologies amid ongoing uncertainty around full electrification.