On May 13, Porsche SE, the largest shareholder of Volkswagen AG, released its first-quarter financial report. The company's profit saw a significant decline during the quarter, dragged down by the weak performance of Volkswagen AG. Porsche SE publicly urged Volkswagen to undertake a fundamental restructuring of its core business model to address the severe market challenges currently faced.
Financial data shows that in the first quarter of this year, Porsche SE's adjusted profit after tax was 382 million euros, a sharp decrease of 21% year-on-year. Additionally, due to a non-cash impairment charge of approximately 1.3 billion euros on its stake in Volkswagen AG, Porsche SE recorded a net loss after tax of 923 million euros for the quarter.
Controlled by the Porsche-Piëch family, Porsche SE currently holds a 31.9% equity stake and 53.3% of the voting rights in Volkswagen AG, along with a 12.5% stake in the sports car manufacturer Porsche AG. Addressing the current operational difficulties at Volkswagen, Hans Dieter Poetsch, Chairman of the Executive Board of Porsche SE, explicitly stated that Volkswagen must thoroughly adjust its business model to align with the new market environment. Poetsch had previously indicated a continued commitment to Volkswagen as a strategic cornerstone investor but also strongly urged the Volkswagen Group and its subsidiaries to actively seek solutions for cost reduction and efficiency improvement.
Currently, Volkswagen AG is under significant pressure from declining profit margins and is at a critical stage of structural reform. Volkswagen CEO Oliver Blume has committed to further intensifying cost-cutting measures, building on the ongoing group-wide plan to reduce staff by 50,000 employees. Although Volkswagen reached an agreement with labor unions in 2024 guaranteeing no plant closures within this decade, its factories in Germany have become a focal point for the group's operational cost reduction efforts due to insufficient capacity utilization.
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