Volkswagen AG has lowered its operating margin forecast for the year, citing a 6 billion euro ($6.9 billion) writedown on the value of its stake in Porsche. The German automaker now expects an operating margin of no more than 1%, a sharp drop from its previous guidance of 4% to 5.5%, as announced on Friday.
The news sent Volkswagen shares down as much as 7.5% in intraday trading, marking the steepest one-day decline in a year. The selloff also rippled across the sector, dragging down peers such as BMW and Mercedes-Benz Group.
Volkswagen anticipates that adverse impacts totaling roughly 10 billion euros this year will weigh on its financial performance. The downgrade follows a difficult round of negotiations with employees this month, which concluded with an agreement to double global job cuts to 100,000 positions.
The company is among several automakers grappling with elevated costs and underutilized production capacity at its German plants, reflecting broader challenges facing the industry.
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