Volkswagen's profits and deliveries plummet in Q1 amid market struggles
WOLFSBURG. Europe's largest automaker, Volkswagen, has reported a sharp drop in profits at the start of the year and says fundamental reforms are urgently needed. "We must fundamentally transform our business model and achieve structural, sustainable improvements," Chief Financial Officer Arno Antlitz declared on Thursday.
Net profit plunged 28.4% in the first quarter to €1.6 billion, while revenue fell to €75.7 billion. Vehicle deliveries also declined, missing analyst expectations—though the company maintained its full-year forecast.
Operating profit dropped 14.3% to €2.5 billion, with an operating margin of just 3.3%, a level Antlitz called "far too low," even after adjusting for one-off effects. The company cited weaker performance in key markets and internal cost pressures as major challenges. Deliveries slumped in North America, and in China—where Volkswagen lost further market share, particularly in electric vehicles—struggles persisted. Additional burdens included roughly €500 million in costs tied to its U.S. restructuring, such as halting production of the ID.4, along with tariffs and plant conversion expenses.
Chinese Rivals Pile Pressure on VW
Business in Europe remained more stable, with gains in the electric segment. Yet observers point to deep-seated structural issues. Beyond intensifying price competition from Chinese automakers, declining profitability has emerged as a core problem.
Economist Martin Gornig highlights the erosion of Volkswagen's technological edge: "The central structural issue is the loss of its technological leadership. In a price war with Chinese competitors, they can only come out worse." (rr)
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