A German nationwide flag on a barge close to the Volkswagen AG manufacturing facility in Wolfsburg, Germany, on Tuesday, March 10, 2026.
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Volkswagen reported weaker-than-expected second-quarter earnings on Friday and scrapped hope for gross sales income progress in 2026, because the German auto big lays the groundwork for a radical overhaul of the enterprise.
Europe’s largest carmaker posted an working revenue of three.5 billion euros ($3.98 billion) for the April to June interval, down practically 10% from a yr in the past and lacking expectations of 4.3 billion euros, in accordance with an LSEG-compiled consensus.
The corporate additionally flagged it expects gross sales income in 2026 to see a decline of as much as 3% this yr, versus a earlier forecast of gross sales income progress of as much as 3%.
The outcomes come shortly after the corporate confirmed it’s trying to lower as much as 100,000 jobs, twice as many as beforehand said, because it seeks to counter a revenue stoop amid billions of euros in tariff prices and intensifying competitors from Chinese language automobile manufacturers.
In a extensively reported memo to employees earlier this month, CEO Oliver Blume mentioned that the group’s prices had been 20% larger than comparable companies and the corporate would due to this fact want to cut back prices even additional.
Volkswagen’s CEO reportedly mentioned the corporate had been unable to substantiate various makes use of for 4 German factories beforehand threatened with closure. These consult with Volkswagen’s vegetation in Hanover, Zwickau, Emden, and the group’s Audi facility in Neckarsulm.
The automaker had agreed a cope with unions in late 2024 to keep away from manufacturing facility closures in Germany and rule out obligatory redundancies till the top of 2030.
Shares of Volkswagen slipped 3% on Friday morning. The inventory is down practically 30% year-to-date.
‘We’ve got to do a second step of restructuring’
Volkswagen Chief Monetary Officer Arno Antlitz mentioned the auto trade has confronted substantial challenges over the previous 12 months, citing the heavy burden of tariff prices, the speedy progress of China’s home premium automobile market and the quickly rising variety of automobile exports from Beijing to Europe.
“This results in this weight on our margin, a margin of roughly 4% is clearly a wake-up name that we have now to do a second step of restructuring,” Antlitz instructed CNBC’s Annette Weisbach on Friday.
Requested whether or not the corporate could look to outsource plant capability to the protection trade to stave off closures, Antlitz replied: “There are numerous choices. And look, I am not on the lookout for job cuts per se and I am not on the lookout for plant closures per se.”
He continued: “We need to cut back our value construction and we need to enhance productiveness and enhance the capability utilization of our vegetation. And if there are higher choices then we are going to clearly look into that.”
Antlitz mentioned it’s “a lot better” for the corporate to seek out another resolution to plant closures.
‘An unprecedented danger situation’
Volkswagen mentioned in April that it might finish manufacturing of the ID.4 electrical sports activities utility automobile out of its Tennessee plant amid a difficult U.S. surroundings for EVs.
Volkswagen’s Blume mentioned Friday that the corporate had managed to offset “continued unavoidable headwinds” within the double-digit billions.
“On the similar time, the surroundings for the automotive trade stays extraordinarily difficult: geopolitical crises, commerce conflicts, excessive regulatory necessities, unstable markets and intensified competitors,” Blume mentioned in a press release.
“In an unprecedented danger situation, Volkswagen Group enters the subsequent section of its transformation – from a place of power and with a transparent understanding of the alternatives forward,” he added.
