Volkswagen cuts profit estimates, falls further on the stock market and leaves the Euro Stoxx 50, while in Germany the workers' protest of the car. The Wolfsburg group has reduced its forecast for the operating margin on sales for 2026 to no more than 1%, from the previous range of 4-5,5%, announcing approximately 10 billion euros of extraordinary expenses, including approximately €6 billion in write-downs related to Porsche. And so, the stock collapsed again in Frankfurt, losing more than 2%.
The alarm on the accounts comes just a few weeks after the agreement on the most extensive renovation plan in the group's history. The weakness of the Chinese market, US tariffs, and the challenges of the electricity transition are complicating the recovery, while job cuts and the risk of relocations and plant closures are fueling union mobilization.
Porsche weighs on Volkswagen's accounts
At the heart of the forecast revision is Porsche, of which Volkswagen holds a 75% stake. The new assumptions about the brand's medium-term performance have led to write-downs of approximately 6 billion euros, within an overall extraordinary impact that also includes restructuring costs and increased provisions for retirements. The sports car manufacturer is feeling the pressure from American duties and the decline in Chinese demand for foreign luxury brands. After posting a margin of just 1,1% last year, Porsche is facing lower expectations for its business and has already reduced its dealer network in China.
The difficulties also involve Porsche SE, the holding company of Volkswagen, which on Friday has in turn lowered its forecasts.
China and electricity complicate the recovery
For Volkswagen, the crisis stems from a combination of multiple factors. In Europe, the group must manage excessive production capacity and the advance of Asian competitors. In the United States, tariffs are weighing heavily, while in China, profits are declining and pressure from local manufacturers is mounting, following Volkswagen's loss of market leadership in 2024. "We have no time to waste," wrote the CFO. arno antlitz in an internal communication seen by ReutersThe manager cited a 20% contraction in China, the growing presence of Asian rivals in Europe, and the rise in sales of less profitable electric cars.
The shift in demand itself adds to the difficulty of the recovery. According to Volkswagen, the faster transition to battery-powered vehicles will lead to lower-than-initially-expected results, especially for Audi and Volkswagen Passenger Cars. The growth of electric vehicles, therefore, does not automatically translate into greater profitability. The group must sustain the transformation of its offering while combustion engines continue to represent a decisive component of the economic balance of the German automotive industry.
Volkswagen out of the Euro Stoxx 50, but analysts see one-off effects
The revision of the estimates is added Volkswagen's exit byEuro Stoxx 50, which became effective Monday as part of the index's annual update. Shares lost 27,5% since the beginning of the year and are moving near their lowest levels since 2010.
The Finnish carmaker takes over the car group Nokia, which benefits from growth in artificial intelligence thanks to its role in data center connectivity. Volkswagen's exclusion follows that of Stellantis a year ago and reflects the difficulties of the European auto industry, grappling with high costs, international competition, and rapidly changing buyer preferences. Analysts at Deutsche Bank However, they urge separating the accounting impact of extraordinary expenses from business performance. In their interpretation, the profit warning makes the business deterioration appear more severe than it actually is. Net of one-off items, margins would remain around 4%, while cash generation capacity would remain intact. This distinction minimizes the impact of the forecast cut on ordinary operations, while still leaving the group's industrial difficulties unresolved.
Volkswagen: Protests in Germany, unions demand answers from management
The financial crisis is accompanied by the workers' mobilization in Germany. Since Monday, September 21, protests have involved Volkswagen, BMW and Bosch across the country, in a sector threatened by staff reductions, possible production relocations, and plant closures.
Volkswagen predicts another 50.000 job cuts as part of the recovery plan agreed upon earlier this month. The agreement avoided an open conflict with the unions, who, however, continue to call on management to address the causes of the crisis. Daniela Cavallo, Chairman of the Works Council of Volkswagen, and Christiane Benner, leaders of IG Metall (the German Metalworkers' Union), are calling for greater protection against unfair Chinese competition, a more effective European subsidy policy and the continuation of the gradual early retirement programme: “We expect the company's top management and management teams to take responsibility for Germany as an automotive nation, for its employees and for its jobs,” Benner told workers at the Wolfsburg site.
Even harsher is the judgement of Horst Ott, a representative of IG Metall, who attributes part of the difficulties to management decisions. "Due to lethargy and disastrous errors of judgment, most managers have failed to keep pace with developments in electric mobility, digitalization, and battery technology, thus causing the German automotive and components industry to lag behind," he said.
