VW Group profits plummet

Volkswagen, Europe’s largest automaker, fails to break out of downward spiral. The group announced early Thursday that it had earned much less in the first half of this year than in the same period last year.

As a result, profit after tax was 7.3 billion euros, nearly 14 percent less than in the first half of 2023. As sales increased slightly, the operating margin fell to 6.3 percent, while in the same period last year the figure was 7.3 percent.

The mixed results of Audi, Porsche and the volume segment are dragging VW down. CEO Oliver Blume believes most of the work is still ahead of him.

Chief Financial Officer Arno Antlitz called the performance “not sufficient for our needs.” The company “will have to make significant cost efforts in the second half of the year and beyond.” CEO Oliver Blume spoke of a good foundation. “But there is still a lot of work to be done.”

The half-year numbers deal Chief Blume’s leadership, which has already been hammered by a number of negative press reports, yet another severe blow. Blume is leading VW through the biggest transformation in the company’s history. Recently, it has become clear that his plan to make the company more profitable for the electric transition is not going as planned.

VW Group’s half-year results: Audi and Porsche struggling

Just last week, Audi and Porsche, traditionally the group’s two most important sources of revenue, had to reduce their margin targets for this year.

At Porsche, delivery problems and the launch of several new cars are putting a strain on the balance sheet. As for Audi, the VW subsidiary’s smallest plant in Brussels, with about 3,000 employees, is in question. Pal Gonna, an automotive analyst at Metzler, estimates, “This is just a taste of what VW as a whole will face in the coming years.

Even in electromobility, there are still obstacles for the Wolfsburg-based company. In China, due to fast-growing competition, the VW Group’s market share for all-electric cars has dropped to about 3 percent.

Interest in buying electric cars has also declined in Europe and America. In both regions, sales of electric vehicles fell by a good 15 percent, as the group announced a few weeks ago with delivery data.