By Rachel More
BERLIN, July 24 (Reuters) – Volkswagen no longer expects revenue to grow this year, the company said on Friday, scrapping its previous forecast and setting the stage for a radical overhaul to shield the group against costly tariffs and intensifying competition from China.
The announcement came with second-quarter results showing a 9.5% profit slump, with CEO Oliver Blume pushing for a radical restructuring of the company, including a proposed 100,000 job cuts, to make it more cost-competitive.
Volkswagen now expects a decline of up to 3% in sales revenue this year, having previously forecast growth of up to 3%. The company maintained its forecast for an operating margin in the range of 4.0 to 5.5%.
The German auto group, which includes subsidiaries Porsche and Audi, reported a operating profit of €3.5 billion ($3.98 billion) in the April-to-June period.
Analysts had expected a slight improvement on the same quarter last year, forecasting a €3.9 billion result in a poll conducted by Visible Alpha.
The group managed to offset “continued unavoidable headwinds in the double-digit billions” in the first half of 2026, Blume said.
“At the same time, the environment for the automotive industry remains extremely challenging,” he said, pointing to geopolitical crises, trade conflicts, high regulatory requirements, volatile markets and intensified competition.
($1 = 0.8787 euros)
(Reporting by Rachel More, Editing by Miranda Murray)
