Volkswagen AG has revised its annual guidance for the second time this year, citing weak demand for its passenger cars, which poses a significant challenge to Germany's automotive sector. On September 27, 2024, the automaker announced a reduction in its forecast for operating return on sales to 5.6%, down from a previous estimate of 7% made in July.
This adjustment comes as Volkswagen grapples with a deteriorating macroeconomic environment and underperformance in its passenger car division. The company now anticipates a profit margin of approximately 5.6% for the year, a decline from the earlier projection of 6.5-7%.
The implications of this forecast cut are profound, as it reflects broader trends in the automotive industry, particularly in Europe, where economic challenges are impacting consumer demand. This situation may lead to increased scrutiny of the automotive sector's recovery strategies and could affect investor confidence in the company.
Source: Reuters, September 27, 2024