Volkswagen announces a collapse in profits, after having announced in recent days the closure of three factories and related dismissals of staff and after having already cut estimates for the current year twice.
The German auto lawsuit is facing difficulties the sector crisis, triggered by reckless choices of the German government, which decided to focus heavily onelectric car undergoing the brutal attack competition from Chinese manufacturers.
The results of the period
The German car giant closed the third quarter with revenues of 78.5 billion euros, down 0.5% compared to the same period in 2023, due to weak demand.
Operating profitwhich takes into account the weight of operating costs and restructuring charges for 2.2 billion euros, it contracted by 41.7% to 2.85 billioni, resulting significantly lower than the 3.89 billion expected by analysts, while the operating margin was reduced to 3.6%, the lowest level in over 4 years. Net profit thus fell by 63.7%, to 1.58 billion euros.
The accounts of nine months they close with a turnover of 237.3 billion euros, a slight increase compared to the 235.1 billion euros in the 9 months of 2023. operating result is equal to 12.9 billion eurosresulting in 21% drop compared to 9 months of 2023 (16.2 billion euros). The Operating Margin stood at 5.4%. Net profit fell 30.7% to 8.9 billion.
The CEO: “Painful cost cuts necessary”
“Our nine-month results reflect a difficult market environment and highlight the importance of carrying forward the restructuring programs that we announced,” commented the Volkswagen CEO Arno Antlitzengaged in fierce negotiations with the unions.
The group’s number one added that the collapse of the operating margin to 2% demonstrates “the urgency need for significant cost reductions and recovery of efficiency” and to carry on “painful measures”.
“I know full well that the cuts we face are hard for each of us, however it is our responsibility to move forward for the future of this company,” Antlitz continued, declining to make further comments on the union negotiations which are covered by confidentiality.
The full-blown crisis of the car
Europe’s largest car manufacturer already has cut its forecast for the current year twice during the quarter, joining competitors BMW and Mercedes, which confirmed the crisis affecting the entire sector.
Volkswagen is also involved in one battle with the unionsafter announcing the closure of 3 of the 10 factories in Germany and thousands of layoffs, shocking the entire country, which is already in recession.
A second cycle of negotiations between Volkswagen and the powerful German union IG Metall is expected to begin today, after the works council leader threatened to break off talks and launch a strike.