FRANKFURT: Volkswagen said Friday (Jul 24) that its net profit plunged in the second quarter as the crisis-hit carmaker, weighing up to 100,000 job cuts worldwide, grapples with increasing competition in and from China.
Net profit for the three months to the end of June came in at 1.54 billion euros (US$1.75 billion), the 10-brand group said, a fall of 32.9 per cent on the same period last year. Last year’s figure was itself a decline of almost 37 per cent on 2024.
The result was hit by a 500 million euro charge the carmaker booked for stopping US production of its electric ID.4, Volkswagen said, as well as “negative mix effects”, meaning the automotive giant sold more lower-margin products.
The firm, which in addition to its own brand also includes the likes of Lamborghini, Audi, Skoda and Porsche, also cut its guidance for the year and said it now saw sales flat or falling up to 3 per cent. It previously expected growth of up to 3 per cent.
The results pile pressure on the beleaguered group, which has been suffering from slimmer margins from the sales of electric cars, US tariffs and above all intense Chinese competition.
“We must accelerate efforts to structurally lower our cost base and sustainably improve our earnings quality,” Volkswagen finance chief Arno Antlitz said. “What matters now is swift and consistent implementation.”