Volkswagen AG reported second-quarter profits that fell short of expectations, with operating profit sliding roughly 10% year-over-year to 3.5 billion euros ($3.98 billion) for the April-to-June period, well below the market consensus of 4.3 billion euros.
Europe's largest automaker cited negative impacts from the discontinuation of its flagship electric model in the U.S. and unfavorable product mix effects as key drags on performance. The company also revised its 2026 sales outlook downward, now forecasting a revenue change of -3% to 0% compared to the previous year, down from its earlier projection of 0% to 3%.
Shortly before the earnings release, Volkswagen confirmed plans to cut up to 100,000 jobs, double the number previously disclosed. The German giant is racing to reverse a profit decline amid high tariffs on its exports and intensifying competition from Chinese automakers.
According to a widely circulated internal memo earlier this month, CEO Oliver Blume stated that the group's cost levels are 20% higher than benchmark companies, necessitating deeper spending cuts. Blume also noted that no alternative uses have been finalized for four German plants that faced closure risks—the Hanover, Zwickau, and Emden factories, along with Audi's plant in Neckarsulm.
In April, Volkswagen announced it would halt production of the ID.4 electric SUV at its Tennessee plant, citing a challenging U.S. electric vehicle market. The company reached a deal with unions in late 2024, pledging to keep German factories open and avoid compulsory layoffs until the end of 2030.
Volkswagen shares have fallen nearly 30% year-to-date and were down 3.3% in pre-market trading in the U.S.
This article is from Sina Finance.
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