Volkswagen (VWAGY) minimize its full-year income outlook on Friday, claiming the surroundings for the auto industry as an entire was “extremely challenging.”
The world’s second-largest carmaker now expects 2026 sales income to be flat or down 3% in comparison with final 12 months, down from a previous forecast of flat to three% development. It held its operating-margin goal at 4% to five.5% and left internet money circulate and liquidity steering unchanged.
The reset got here alongside a combined second quarter. Group sales income rose 2.0% to €82.4 billion ($93.9 billion) — however that achieve was pushed by its monetary providers division and better pricing. Vehicle sales fell 9.7% to 2.04 million items, and manufacturing dropped 13.4% to 2.01 million.
VW’s working end result (much like EBIT) fell 9.5% to €3.47 billion ($3.96 billion), with working margin falling to 4.2% from 4.7% a 12 months in the past.
“Applying disciplined cost management, we have managed to offset continued unavoidable headwinds in the double-digit billions,” CEO Oliver Blume stated in a press release. “At the same time, the environment for the automotive industry remains extremely challenging: geopolitical crises, trade conflicts, high regulatory requirements, volatile markets and intensified competition.”
Automotive internet money circulate swung to a optimistic €1.17 billion ($1.33 billion) within the quarter, from an outflow of €523 million ($596 million) a 12 months earlier, however it was principally the results of decrease funding, decreased tax funds, and working-capital timing.
China remains a worrying development for VW. While general group deliveries fell 8.6% worldwide within the quarter, China sales plunged 36.6% to 424,300 automobiles, in opposition to positive aspects of seven.7% in North America, 9.4% in South America, and a couple of.5% in Europe.
CFO Arno Antlitz stated the Chinese complete market is down 20% and warned that Chinese rivals “are increasing exports and thereby competitive pressure in Europe.”
In addition, Volkswagen listed US tariffs, US commerce limitations, and worldwide regulation among the many “external forces” squeezing European producers. He named US tariffs as one in all three drags — together with particular objects and weak China — on the half-year working end result.
Interestingly, the web tariff hit within the first half was truly a small achieve of €0.1 billion ($0.1 billion), however this got here after tariff offsets and reimbursements at Audi and Volkswagen.
VW’s 2026 outlook assumes the present tariff scenario holds and excludes any escalation within the Middle East.
Among the manufacturers, Porsche’s working end result jumped to €692 million ($789 million) from €154 million ($176 million) a 12 months earlier, and truck unit Traton rose to €902 million ($1.03 billion). The core Volkswagen-Škoda-Cupra group slipped to €2.07 billion ($2.36 billion) from €2.34 billion ($2.67 billion).
