© Reuters. FILE PHOTO: A Volkswagen logo is seen during the New York International Auto Show, in Manhattan, New York City, U.S., April 5, 2023. REUTERS/Andrew Kelly

BERLIN (Reuters) – Volkswagen (ETR:) significantly increased deliveries in the first quarter despite weaker business in China, its most important single market, the German carmaker said on Friday.

The group delivered 2.04 million vehicles to customers worldwide, up 7.5% compared with the same quarter last year, while in China, sales fell 14.5% to 644,500 vehicles.

Sales in Western Europe provided a boost to overall figures, up slightly more than a quarter as production no longer feels the effects of semiconductor shortages as strongly.

Volkswagen reported a 25.4% decrease in battery-electric vehicles (BEVs) in China in the first quarter, to 21,500 vehicles, while worldwide deliveries were up 42.1%.

Volkswagen and other foreign carmakers are struggling to keep up with Chinese automakers, who are stepping up the pace and pressure to cut costs in a market where electric-drive cars now make up almost a third of new sales.

VW’s mass-market brands have lost share in China over the past year as the market shifted to electric vehicles (EVs) and plug-in hybrids where made-in-China brands, led by BYD, have moved faster.

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