Volkswagen cut its sales and car delivery forecasts for the year and reiterated that it must do more to counter mounting industry headwinds that include geopolitical and trade conflicts, regulatory requirements, volatile markets and intensified competition.
The German automaker said it now expects full-year sales to land somewhere between flat and a 3% decline, having previously guided for flat to 3% growth, mainly due to steep volume declines in China after the total market in the country slumped 20% in the first half.
Deliveries are expected to fall between 3% and 7% on year from a previous forecast of flat unit deliveries, as the company adjusts expectations for the weakening Chinese market.
It still expects an operating margin of between 4% and 5.5% this year, up from the 2.8% it logged in 2025.
After working on a broad cost-cutting plan throughout 2025 and 2026, Volkswagen has pledged to double down as global challenges intensify, with new U.S. tariffs, an end to U.S. electric vehicle subsidies, rising manufacturing costs and mounting competition from Chinese rivals both in China and increasingly in Europe.
"We must accelerate efforts to structurally lower our cost base and sustainably improve our earnings quality," Chief Financial Officer and Chief Operating Officer Arno Antlitz said Friday. "What matters now is swift and consistent implementation."
The original plan saw the company reach an agreement with its powerful unions to cut 50,000 jobs across the group in Germany by 2030 and slash billions of euros a year in costs while at the same time avoiding factory closures.
But after warning recently that the measures wouldn't be enough, executives pledged to go further as they seek to make the sprawling group leaner and more efficient.
It aims to cut its model lineup by as much as half and will continue to reduce manufacturing capacity, and recently said that the next few years will be critical.
In an internal memo published earlier this month, Chief Executive Oliver Blume said the automaker had a 20% cost disadvantage to its peers in administration, infrastructure and other functions that support its core operations and that closing the gap without cutting pay would theoretically reduce staffing by a further 50,000.
Blume also said in the memo that he couldn't guarantee the future of the Emden, Hannover, Zwickau or Neckarsulm plants in Germany.
Executives will meet with labor leaders and staff in a series of sessions across German sites in August, following the summer break.
The company didn't provide any further details in its report Friday.
The group, which houses a stable of brands that includes VW, Audi and Porsche, reported a 2% rise in second quarter revenue to 82.44 billion euros ($93.8 billion), with operating profit down 9.5% at 3.47 billion euros and an operating margin of 4.2%.
A FactSet analyst poll had expected operating profit of 4.02 billion euros on revenue of 81.16 billion euros.
It also reported a 1.3 billion-euro hit from U.S. tariffs on operating profit for the first half as a whole.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
July 24, 2026 02:35 ET (06:35 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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