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Volkswagen warned of “uncertainties regarding restrictions in international trade and geopolitical tensions” as it projected weaker than expected profits for the year.
The German carmaker was “operating in a fundamentally different environment,” which required “continuing our disciplined work on saving costs”, its chief executive Oliver Blume said in a statement.
Volkswagen said it expected its operating margin to sit between 4 and 5.5 per cent in 2026, compared with the 5.2 per cent rate forecast by analysts surveyed by Visible Alpha. Its margin came in at 4.6 per cent last year excluding restructuring costs.
The carmaker’s chief financial officer Arno Antlitz said its current profit levels were “not sufficient in the long run”.
Volkswagen wanted to continue investing in software, battery technology and its combustion engine models, as well as aiming to “expand our regional presence, particularly in the United States”, he said.
But the group needed to “continue to rigorously reduce costs . . . and sustainably increase profitability” by also reducing “the complexity” of its sprawling structure with its many subsidiaries.
The company said it expected revenues, which were €322bn in 2025, to increase by up to 3 per cent next year.
The lower-than-expected profitability figure comes as Volkswagen faces increased tariff costs in the US and continuing competition from Chinese rivals who are extending their footprint beyond their home market.
Volkswagen’s profits more than halved last year due to a costly adjustment to Porsche’s electrification and sharply increased US tariffs.
The carmaker said US tariffs had a total impact of €2.9bn on the company via customs payments and lost sales. Its operating profit fell to €8.9bn from €19bn in 2024, equivalent to a margin of 2.8 per cent.
After booking a €4.7bn impairment due to Porsche in the third quarter, Volkswagen’s profitability was higher in the fourth quarter at 4.2 per cent, but still below its average in 2024.
