German automaker lowers sales outlook amid China slowdown and tariff pressures
BERLIN: Volkswagen reported a sharp decline in second-quarter earnings on Friday as weakening sales in China, tariff-related costs and intensifying competition weighed heavily on the performance of Europe’s largest carmaker.
The German automotive group posted a net profit of €1.54 billion ($1.75 billion) for the three months ending in June, representing a 32.9 percent drop compared with the same period last year.
At the same time, Volkswagen lowered its sales forecast for 2026. The company now expects sales to decline by as much as 3 percent, reversing its earlier projection of flat to 3 percent growth.
The revised outlook follows weaker-than-expected financial results and reflects continued challenges in key international markets.
Operating profit misses expectations
Volkswagen, which owns brands including Porsche and Audi, reported an operating profit of €3.5 billion ($3.98 billion) for the April-to-June quarter. The figure marked a 9.5 percent year-on-year decline and fell below market expectations.
The company attributed the weaker performance to growing pressure from tariffs and fierce competition in China, where domestic electric vehicle manufacturers continue to strengthen their market position.
Industry analysts have highlighted China as one of Volkswagen’s most important markets, making the slowdown particularly significant for the group’s global performance.
Restructuring plans continue
Chief Executive Officer Oliver Blume said the company is moving ahead with what he described as its most comprehensive restructuring programme to date.
Among the proposed measures is a plan that could result in up to 100,000 job cuts worldwide as Volkswagen seeks to improve efficiency and reduce operating costs. The proposal remains part of the company’s broader transformation strategy aimed at strengthening competitiveness during a period of rapid change in the global automotive industry.
Volkswagen continues to invest in electric vehicles and digital technologies while adapting its operations to changing consumer demand and increasing competition. The latest financial results underscore the scale of the challenges facing traditional automakers as they navigate slowing growth, evolving market conditions and the costly transition toward electrification.
