German Vice-Chancellor and Finance Minister Lars Klingbeil, Lower Saxony State Premier Olaf Lies, and Volkswagen works council chief Daniela Cavallo stand after speaking to the media following talks with Volkswagen labour representatives at the carmaker’s main German plant in Wolfsburg, Germany, on Thursday.
German auto giant Volkswagen warned Friday of a €10bn ($11.4bn) hit to its annual earnings, citing tough conditions in China, problems at subsidiary Porsche and restructuring costs, reports AFP.
Europe’s biggest carmaker, in the process of pushing through the global auto industry’s largest job-cutting drive, said it expected a profit margin of just 1% for 2026, down from a previous forecast of between four and 5.5%. Like its peers, Volkswagen has struggled with the costs of transitioning to electric
vehicles as well as falling demand and cut-throat competition in China, the world’s largest car market. The Volkswagen and Audi marques were particularly feeling the heat in China, the 10-brand group said Friday.
“The situation on global markets has continued to worsen — particularly in China”, VW finance boss Arno Antlitz said in an interview on the company intranet. “Demand for battery-electric vehicles has accelerated, partly against the backdrop of the geopolitical situation and a sharp rise in petrol prices, and we currently earn significantly less from these than from internal combustion engine cars,” he added.