Volkswagen slashed its 2026 profit margin guidance to at most 1%, down from a previous 4.0%-5.5% range, after flagging €10 billion ($11.5 billion) in one-off charges. Shares fell on the news as the automaker cited a weakening Chinese market and provisions for job cuts.
Volkswagen cut its 2026 profit margin outlook to at most 1%, down from a prior guidance of 4.0% to 5.5%, on Friday. The German automaker flagged €10 billion ($11.5 billion) in one-off items tied to its stake in Porsche, provisions for job cuts, and a weak Chinese market.
Shares in the company fell 5.6% on the news. The profit warning deepens a crisis at the world's second-largest automaker, which earlier this month agreed on far-reaching cuts with unions amid fierce competition from Asian rivals, US tariffs, and stagnant demand in Europe.
Cause: China and shifting EV demand
Volkswagen warned of a "further deterioration in the market environment, especially in China" and an accelerated shift in demand toward battery-electric vehicles. As a result, the company said this would lead to lower expectations for its Audi and Volkswagen passenger car brands.
The group, which also includes the Audi, Skoda, and Seat brands, faces pressure on multiple fronts at once. Asian rivals continue to compete aggressively, US tariffs add to the strain, and demand in Europe remains stagnant.
What comes next
The outlook cut follows an agreement Volkswagen reached with unions earlier this month covering far-reaching job and cost cuts. The fresh €10 billion charge and the sharper China slowdown mark a fresh setback for the stock market heavyweight barely weeks after the union deal.
Source: Investing.com
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