Khaberni - Volkswagen Group's profits have declined during the second quarter of the current year, with a sharp decrease in its sales in China, while the giant company expects its total revenue to decline by the end of the current year.
The largest car manufacturer in Europe, based in Wolfsburg, announced today, Friday, that the group's net profits after taxes decreased during the period from April/June to June/June 2026 to 1.54 billion euros (about 1.75 billion dollars), a 9.32% compared with the same period last year, where it was about 2.29 billion euros (about 2.61 billion dollars).
The company had previously announced that total car deliveries had decreased by about 9% to 2.08 million vehicles. In the important Chinese market for Volkswagen, sales dropped by more than a third to 424,300 vehicles, while sales were relatively better in markets outside of China.
"The Pressure is Greater Than We Anticipated"
The company also reduced its revenue forecasts for the entire year, instead of expecting a revenue increase of up to 3% compared to the previous year, Volkswagen's CEO, Oliver Blume, now expects the company to, at best, stabilize its revenue in 2026, and it may decrease by up to 3%.
The Financial Times reported that Volkswagen Group's sales in China saw a decrease of 31.6% during the first half of 2026. In contrast, the company recorded an increase in sales volume in both Europe and North America during the same year.
Blume said in a conference call that Chinese manufacturers "have sharply increased their exports, putting pressure in Europe", indicating that the increasing competition is affecting the entire European car sector.
Blume explained that the pressures in Europe were "greater than we anticipated", adding that Chinese car manufacturers had made significant inroads into the hybrid car market, and urged the European Union to establish what he described as "a level playing field" in this sector by increasing customs duties on Chinese hybrid cars.
Plans to Reduce Employment
Blume had explained last spring that the tariffs imposed by the administration of US President Donald Trump, the ramifications of the war in the Middle East, and intense competition, especially from China, are pressuring factors on the company.
Blume announced his intention to implement new austerity measures, including significant cuts in expenditures, with a study to cut up to 50,000 jobs worldwide, in addition to a previously announced plan to cut 50,000 jobs by 2030.
The austerity plans face strong opposition from unions and the workers' council, as well as from Lower Saxony, which owns 20% of Volkswagen's shares and has two members on the supervisory board. Representatives of the state and the workers together form the majority inside the board, and reports indicate that the board initially rejected these plans.
Volkswagen had already announced its intention to cut 50,000 jobs in Germany across the group by 2030, including 35,000 jobs in the primary brand, while the remaining jobs include its subsidiaries such as Audi and Porsche.
