Volkswagen has revised its annual profit outlook for the second time in three months, now expecting a margin of approximately 5.6% for 2024, down from a previous estimate of 6.5-7%. This adjustment reflects a challenging market environment and disappointing sales, particularly in its passenger car division.
The German automaker anticipates a 0.7% decline in sales to 320 billion euros, a significant shift from earlier expectations of growth. Global deliveries are now projected at around 9 million vehicles, a decrease from prior forecasts.
In light of falling demand, Volkswagen is considering closing plants in Germany for the first time in its history, responding to increased competition from cheaper Chinese brands and a softening global economy.
Additionally, Volkswagen has initiated negotiations with IG Metall over wages and job security, amidst potential strikes due to demands for a 7% salary increase. The company’s stock has reacted negatively, with shares trading lower following the announcement.
Porsche SE, the largest shareholder of Volkswagen, has also adjusted its profit expectations, reflecting the broader challenges faced by the automotive industry in Germany, particularly in the electric vehicle sector.