Today, Germany’s leading auto manufacturer downgraded its annual outlook and announced a significant decline in second-quarter profits, as it contends with the disruptive effects of U.S. tariffs and restructuring expenses.
Volkswagen reported Q2 sales revenue of 80.8 billion euros, falling short of analyst expectations of 82.2 billion euros.
In the earnings report, Oliver Blume, CEO of Volkswagen Group, told investors, “Driven by the success of our new products, Volkswagen Group held its ground in an extremely challenging environment. We made noticeable improvements in design, technology, and quality, and achieved significant progress in software. Our sales figures remain stable in a competitive global market. In Europe we expanded our leading position in electric mobility, with a market share of 28 percent and order books remain well filled.”
Looking ahead, Volkswagen announced that its 2025 operating return on sales is now projected to be between 4% and 5%, a decrease from the earlier forecast of 5.5% to 6.5%. Full-year sales are anticipated to be similar to 2024, rather than increasing by 5% as previously predicted.
In an earnings call with investors, Blume stated, “We hope that it will come to a well-balanced deal between the U.S. and the EU, which allows fair trade between the regions.”
Arno Antlitz, CFO & COO of Volkswagen Group stated, “Our half-year figures present a contrasting picture: on the one hand, we achieved strong product success and made progress in realigning the company. On the other, the operating result declined by a third year-on-year – also due to higher sales of lower-margin all-electric models. In addition, increased US import tariffs and restructuring measures had a negative impact.”
“But what really matters is cash in the bank. That’s why we must press ahead with our ongoing programs to improve earnings and pick up the pace where necessary.”
Moving forward, the company CEO said, “Supported by our ongoing product offensive and consistently good demand, we expect the positive trend to continue in the second half of the year.”
Volkswagen’s shares were up 2.2% following the company’s announcement.
By CEO NA Editorial Staff
