Volkswagen AG's profit for 2025 has seen a sharp decline. On March 10, the German automotive giant released its 2025 financial results. The report indicates that the group's sales revenue reached 321.9 billion euros, nearly unchanged compared to 324.7 billion euros in 2024. However, the group's operating profit was 8.9 billion euros, a decrease of 53% year-on-year, marking the lowest level since 2016. The operating profit margin stood at 2.8%. After-tax net profit fell by 44.3% to 6.9 billion euros. Due to profits dropping to their lowest point in nearly a decade, Volkswagen announced plans to cut 50,000 jobs in its home market of Germany by 2030.
The company attributed the decline in operating profit primarily to US tariffs, costs related to Porsche's product strategy adjustments, foreign exchange rates, and changes in pricing and product mix. The effective implementation of performance programs partially offset these pressures.
The financial report showed that, excluding special items, the group's operating profit for 2025 was 14.8 billion euros. Further excluding the impact of US tariffs, the operating profit would have been 17.7 billion euros, corresponding to an operating profit margin of 5.5%.
In a letter to shareholders, Oliver Blume, Chairman of the Board of Management of Volkswagen AG, stated, "By 2030, the Group will reduce a total of approximately 50,000 positions in Germany." Previously, the group had reached an agreement with labor unions at the end of 2024 to cut 35,000 jobs at its core Volkswagen brand by 2030, as part of a plan to save 15 billion euros annually. The additional job reductions will come from premium brands like Audi and Porsche, as well as Volkswagen's software subsidiary, Cariad.
Blume mentioned that Chinese automakers are setting their sights on the European market, attempting to escape fierce domestic price wars through exports, which will increase pressure on Volkswagen. "We need to be prepared for price pressure. This is prompting us to invest a great deal of effort in cost control," he said.
In terms of sales, the group's global vehicle deliveries were nearly 9 million units in 2025, a slight decrease of 0.5% year-on-year. Sales in Europe grew by over 4%, while North American sales fell by 10% compared to the previous year. Sales in China declined by 8% annually to 2.6938 million vehicles, yet China remained the group's largest single market globally.
Furthermore, the sales performance of the group's various brands showed divergent trends.
Benefiting from a 3.3% increase in deliveries, the sales revenue of the group's 'Core' brand cluster (Volkswagen, Škoda) rose to 145.2 billion euros (up 3.7% year-on-year). Operating profit was 6.8 billion euros, a slight decrease of 2% from the previous year, with an operating profit margin of 4.7% (down 0.3 percentage points year-on-year). Volkswagen Group explained that this was mainly due to the negative impact of US tariffs. For the Volkswagen brand, excluding the effects of US tariffs and special items, business performance met expectations.
The 'Progressive' brand cluster saw sales revenue increase to 65.5 billion euros (up 1.5% year-on-year), but operating profit was 3.4 billion euros, down 13.6% year-on-year. The operating profit margin was 5.1% (down 0.9 percentage points). The operating profit was primarily affected by US tariffs and expenses related to agreements for Audi's future development.
The 'Sport Luxury' brand cluster reported sales revenue of 32.2 billion euros (down 11.7% year-on-year). Operating profit was 100 million euros (compared to 5.3 billion euros in 2024), resulting in an operating profit margin of 0.3% (a decrease of 14.2 percentage points). The group stated this was mainly influenced by fundamental changes in the Chinese market environment, US tariffs, a slowdown in electrification, and related one-time and special items. Additionally, the company has initiated strategic business adjustments to enhance long-term profitability and operational resilience.
Looking ahead to 2026, Volkswagen Group forecasts sales revenue growth of 0% to 3% year-on-year. The operating profit margin is projected to be between 4% and 5.5%. The upper end of this range is roughly in line with the 2025 level excluding special items. Net cash flow from the automotive business is expected to be between 3 billion and 6 billion euros, with net liquidity projected to reach 32 billion to 34 billion euros.
Simultaneously, the group emphasized that it expects to continue facing multiple challenges. These primarily stem from macroeconomic uncertainties, international trade restrictions, tense geopolitical situations, intensifying market competition, volatility in commodity, energy, and foreign exchange markets, and higher compliance requirements due to emissions-related regulations.
In the Chinese market, Volkswagen Group delivered approximately 2.7 million vehicles in 2025. The operating profit accounted for under the equity method was about 958 million euros, reaching the upper end of the 2025 performance guidance range. Furthermore, 2026 is seen as a critical year for accelerating the implementation of the group's strategic transformation results. The group plans to launch more than 20 new all-electric, plug-in hybrid, and extended-range models in the Chinese market.
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