By Dominic Chopping
Volkswagen expects profitability to improve this year as it continues to focus on cutting costs in what is expected to be another challenging 12 months.
The German automaker said it expects an operating margin of between 4% and 5.5% this year, with revenue landing between flat and 3% above last year's figure.
It reported revenue of 321.91 billion euros ($374.62 billion) in 2025 with an operating margin of 2.8%, having guided for revenue at a similar level to the 324.66 billion euros posted in 2024 and a margin of 2% to 3%.
The company said it has an ambition to reach a margin of 8% to 10% in 2030.
"This will be built on strict cost and investment discipline," Chief Executive Oliver Blume said.
Volkswagen agreed to a deal with unions late in 2024 to reduce its workforce by more than 35,000 and cut billions of dollars a year in costs, as it contended with high domestic costs, stuttering demand for electric vehicles and increasing competition from lower-cost Chinese EV makers.
Headwinds have since continued, with intensified competition in China, President Trump's tariffs and the discontinuation of EV subsidies in the U.S.
"In this challenging environment, we want to keep our combustion engine vehicles technologically competitive, continue investing in exciting electric vehicles and the latest software solutions for our customers, and expand our regional presence, particularly in the U.S.," Chief Financial Officer Arno Antlitz said.
The group's Audi and Porsche brands and its Cariad software subsidiary have all launched their own cost programs, and in total around 50,000 jobs are due to be cut by 2030 across the Volkswagen group in Germany.
As a result of collective bargaining agreements and downsizing measures, the group achieved cost savings of around 1 billion euros in 2025 and it is on track to achieve net annual cost savings of over 6 billion euros across the group by 2030.
In China, the company is beginning to deliver on its strategy to offer vehicles designed specifically for consumers in the country. By the end of 2027, it will have launched 30 new all-electric, plug-in hybrid and range-extended models in China and it is tapping into export opportunities for the models into new markets.
"In the U.S., we are firmly aligning our activities with the dynamic competitive environment, specific customer requirements and the evolving tariff situation," the company said.
Plans for the group's Scout brand in the U.S. are on track as it prepares for the next step of launching the new brand. At the same time, it is exploring the possibility of localizing the production of imported vehicles from the group's brands in the North American market, it added.
The carmaker's fourth-quarter operating profit fell to 3.46 billion euros from 6.25 billion euros, as revenue fell 4.7% to 83.25 billion euros.
A FactSet analyst poll had expected operating profit of 4.13 billion euros on revenue of 85.16 billion euros.
The company proposed a dividend of 5.20 euros an ordinary share and 5.26 euros a preferred share, down from the 6.30 euros and 6.36 euros it paid in the previous year, respectively.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
March 10, 2026 03:51 ET (07:51 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments