A German nationwide flag on a barge close to the Volkswagen AG manufacturing unit in Wolfsburg, Germany, on Tuesday, March 10, 2026.
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Volkswagen reported weaker-than-expected second-quarter income on Friday and scrapped hope for gross sales income development 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 almost 10% from a yr in the past and lacking expectations of 4.3 billion euros, based on 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 development of as much as 3%.
The outcomes come shortly after the corporate confirmed it’s seeking to minimize as much as 100,000 jobs, twice as many as beforehand acknowledged, 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 broadly reported memo to workers earlier this month, CEO Oliver Blume stated that the group’s prices have been 20% increased than comparable companies and the corporate would due to this fact want to cut back prices even additional.
Volkswagen’s CEO reportedly stated the corporate had been unable to substantiate various makes use of for 4 German factories beforehand threatened with closure. These seek advice from Volkswagen’s crops 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 unit closures in Germany and rule out obligatory redundancies till the tip of 2030.
Shares of Volkswagen year-to-date.
Shares of Volkswagen slipped 3% on Friday morning. The inventory is down almost 30% year-to-date.
‘We’ve got to do a second step of restructuring’
Volkswagen Chief Monetary Officer Arno Antlitz stated the auto trade has confronted substantial challenges over the previous 12 months, citing the heavy burden of tariff prices, the speedy development 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 informed 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.”
A employee performs a ultimate examine on new Volkswagen ID.3 electrical vehicles on the Volkswagen plant on Could 14, 2025 in Dresden, Germany.
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He continued: “We need to cut back our value construction and we need to improve productiveness and improve the capability utilization of our crops. And if there are higher choices then we’ll clearly look into that.”
Antlitz stated it’s “significantly better” for the corporate to seek out another resolution to plant closures.
‘An unprecedented threat state of affairs’
Volkswagen stated in April that it might finish manufacturing of the ID.4 electrical sports activities utility car out of its Tennessee plant amid a difficult U.S. setting for EVs.
Volkswagen’s Blume stated Friday that the corporate had managed to offset “continued unavoidable headwinds” within the double-digit billions.
“On the identical time, the setting for the automotive trade stays extraordinarily difficult: geopolitical crises, commerce conflicts, excessive regulatory necessities, unstable markets and intensified competitors,” Blume stated in an announcement.
“In an unprecedented threat state of affairs, Volkswagen Group enters the following section of its transformation – from a place of power and with a transparent understanding of the alternatives forward,” he added.
