Volkswagen Group reported first-half operating profit of €5.93bn, representing an 11.6% decline from the prior year, as the automotive manufacturer navigated what it characterized as a demanding operating environment. Sales revenue for the period decreased marginally by 0.2% to €158.10bn, while operating return on sales contracted to 3.8% from 4.2% in the comparable period.
The company attributed the €0.8bn profit decline primarily to approximately €0.5bn in costs associated with ending US production of the ID.4 electric vehicle, along with unfavorable product mix effects. These headwinds were partially mitigated by reductions in restructuring expenses, favorable currency movements, and lower fixed costs. When excluding special items, operating results reached €6.9bn with a return on sales of 4.3%.
Geographic performance proved uneven across the group. A significant 31.6% decline in China market deliveries overshadowed growth in South America, Western Europe, and Central and Eastern Europe. Overall customer deliveries fell 6.3% to 4.13 million units in the half, while vehicle sales decreased 8.4%. Among the brand divisions, Core posted operating profit of €3.61bn on €73.03bn in revenue, while Sport Luxury achieved €1.20bn in operating profit despite lower revenue compared to the prior year.
VW revised its full-year 2026 revenue guidance downward, now projecting a decline between 3% and flat compared to the previous year, departing from prior expectations of 0% to 3% growth. The company maintained its operating return on sales target of 4.0% to 5.5% and investment ratio guidance of 11% to 12% for the Automotive Division. Chief executive Oliver Blume attributed the challenging outlook to macroeconomic pressures, international trade uncertainties, geopolitical tensions, intensified competition, and commodity price volatility. The company announced potential additional job cuts of 50,000 positions, which combined with previously committed reductions could bring total eliminations to 100,000 roles.
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