Adds context on market challenges, European figures

By Rachel More

BERLIN, April 13 (Reuters) - Volkswagen VOWG_p.DE reported a 4% fall in global deliveries in the first three months of 2026, as weak demand in China and the U.S. weighed on the German automaker.

The group is battling to stem losses in key overseas markets, facing intensifying competition from Chinese rivals such as BYD 002594.SZ, and pressure from tariffs and the end of electric vehicle subsidies in the United States.

First-quarter deliveries slumped 15% in China and 20.5% in the U.S., Volkswagen said in a statement.

"The first quarter of 2026 was once again characterized by very challenging economic and geopolitical conditions," sales chief Marco Schubert said, adding that the global automotive market was in decline.

China's slowdown has also hit Volkswagen brands Porsche P911_p.DE and Audi, whose quarterly deliveries in the world's largest auto market fell 21% and 12%, respectively.

Once a key growth engine for German carmakers, China has become a major challenge for Volkswagen and rivals Mercedes-Benz MBGn.DE and BMW BMWG.DE, as a cut-throat price war with fast-moving local brands squeezes margins.

Ahead of the Beijing auto show later this month, Volkswagen is banking on a wave of new EVs developed with local partners to regain ground in China.

Model launches are also planned for Europe, where the group maintained growth in the first quarter.

Deliveries rose 4% in Western Europe and 8% in Central and Eastern Europe, according to the statement.