Volkswagen cuts 2026 profit margin forecast to 1% on 10 billion charges, China woes

Volkswagen slashed its 2026 operating profit margin forecast to a maximum of 1% on Friday, down from a prior range of 4% to 5.5%, citing a €10 billion hit from restructuring costs, Porsche writedowns, and weak demand in China.
The German automaker now expects revenue of €315 billion, a €5 billion reduction from earlier guidance, with sales flat or down 3%. A €6 billion non-cash impairment on Porsche’s brand value, driven by lower expectations for the luxury unit’s future performance, will weigh on third-quarter earnings. Additional costs include expanded early retirement programs and the planned sale of its Osnabrück plant, with total second-half charges estimated at €2 billion.
Volkswagen’s share price fell as much as 7.5% to €74.96, its lowest in two weeks, dragging Germany’s DAX index down 1.6%. The company attributed the downgrade to a deteriorating market environment, particularly in China, and a faster shift to electric vehicles, where margins remain lower than for combustion models. Audi and the core Volkswagen brand were singled out as underperforming expectations.
The group also faces further non-cash writedowns on Chinese operations and has announced plans to cut 50,000 jobs in Germany by 2030, with 35,000 at the core brand. Over 37,000 employees have already agreed to early retirement under a 2024 labor deal.
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