By Stephen Wilmot
For Volkswagen, hostilities in the Middle East add to a landscape already crowded with geopolitical risks.
There was "the U.S., then China, and now comes the Middle East," Chief Executive Oliver Blume said Tuesday.
The Middle East is a small but highly profitable market for Volkswagen's high-end Audi and Porsche brands. Last year group sales in the Middle East and Africa region rose 10% to around 421,000 vehicles, helping to offset declines in China and the U.S.
"Customers in the Middle East are understandably uncertain right now. This will cause a dip, and we'll see what the outcome is at the end of the year. But it will definitely have an impact," Blume said.
The comments came as Volkswagen said annual operating profit-a key measure of performance for automakers-roughly halved in 2025 to 8.9 billion euros, equivalent to $10.4 billion.
President Trump's tariff agenda cost the company roughly EUR2.9 billion. Neither Audi nor Porsche make any vehicles in the U.S., and the Volkswagen brand imports higher-volume models from Mexico. That makes the company more exposed than most carmakers to the White House's signature trade policy.
Volkswagen has also been losing ground to local electric-vehicle brands in China, where it long led the market. It expects profit from its Chinese joint ventures to fall again this year.
Finance chief Arno Antlitz said the company's guidance for 2026 was based on an oil price of EUR60, well below current levels, though he stressed that its energy costs were dependent on long-term contracts.
"From today's perspective we're not assuming long-term effects on sales to our clients, but of course we're watching the situation," Antlitz said.
Volkswagen stock rose 3% in European trading as the oil price retreated. Shares in the automaker are still down 11% since the U.S.-Israeli strikes on Iran.
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(END) Dow Jones Newswires
March 10, 2026 07:42 ET (11:42 GMT)
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