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In its second-quarter results, the company reported a 9.5% decline in operating profit to 3.5 billion euros. Revenue rose to 82.4 billion euros, exceeding analysts’ expectations, but this was not enough to improve its financial outlook. Volkswagen now expects annual revenue to decline by up to 3%, whereas it had previously anticipated growth of around 3%. The forecast for operating margin remains at 4–5.5%, compared with 2.8% a year earlier.
The market reacted negatively: following the release of the earnings report, Volkswagen shares fell by about 3%, according to Reuters.
Group CEO Oliver Blume stated that the automotive industry is going through one of the most challenging periods in recent years. According to him, the business is simultaneously under pressure from geopolitical instability, trade restrictions, increasing regulatory requirements, and a changing competitive landscape—primarily due to the rapid rise of Chinese brands.
In response, Volkswagen is accelerating a large-scale transformation program. Management intends to significantly reduce production capacity, nearly halve the number of models produced, and continue to optimize its workforce. According to German media reports, cuts of up to 100,000 jobs are being discussed, as well as the possibility of closing several plants. These plans are expected to be the subject of difficult negotiations with labor unions.
China—the world’s largest automotive market—remains an additional source of pressure. In the first half of the year, global deliveries of Volkswagen vehicles fell by 6.3%, mainly due to the continuing decline in sales in China, where local electric vehicle manufacturers are actively capturing market share from foreign brands.
At the same time, the company is seeing the first positive signs in other regions. In the second quarter, sales in North America began to recover, while in Europe, demand grew for new, affordable electric vehicles under the Volkswagen, Skoda, and Cupra brands. This has led to an increase in orders, although it has not yet offset the weakness of the Chinese market.
For Volkswagen, 2026 will be a test of the effectiveness of its largest transformation in recent decades. Whether the company succeeds in cutting costs, regaining competitiveness in China, and accelerating the development of its electric vehicle business will determine not only its financial performance but also its position in the global automotive market.
