A German national flag on a barge near the Volkswagen AG factory in Wolfsburg, Germany, on Tuesday, March 10, 2026.
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Volkswagen reported weaker-than-expected second-quarter earnings on Friday, dashing hopes of revenue growth in 2026 as the German auto giant lays the groundwork for a radical overhaul of its business.
Europe’s largest automaker posted an operating profit of 3.5 billion euros ($3.98 billion) in the April-June period, down nearly 10% from a year earlier and missing expectations of 4.3 billion euros, according to a consensus compiled by LSEG.
The company also noted that it expects sales to decline by up to 3% in 2026, compared to previously forecast sales growth of up to 3%.
The results come shortly after the company confirmed it intended to do so cut up to 100,000 jobstwice as many as previously stated in order to counteract a slump in profits in the face of billions in tariff costs and increasing competition from Chinese car brands.
In one widely reported In a memo to staff earlier this month, CEO Oliver Blume said the group’s costs were 20% higher than comparable companies and the company therefore needed to reduce costs even further.
Volkswagen’s chief executive reportedly said the company had been unable to confirm alternative uses for four German factories that were previously at risk of closure. These are the Volkswagen plants in Hanover, Zwickau, Emden and the group’s Audi location in Neckarsulm.
The car manufacturer reached an agreement with the unions at the end of 2024 to prevent factory closures in Germany and rule out forced layoffs until the end of 2030.
Volkswagen shares since the beginning of the year.
Shares of Volkswagen fell 3% on Friday morning. The stock has fallen nearly 30% since the start of the year.
“We have to take a second step of restructuring”
Volkswagen Chief Financial Officer Arno Antlitz said the automotive industry had faced significant challenges in the past 12 months, citing the high burden of tariff costs, the rapid growth of China’s domestic market for premium cars and the rapidly growing number of car exports from Beijing to Europe.
“This creates this strain on our margin. A margin of around 4% is clearly a wake-up call that we need to do a second step of restructuring,” Antlitz told CNBC Annette Weisbach on Friday.
Asked whether the company might outsource plant capacity to the defense industry to avoid closures, Antlitz replied: “There are different options. And look, I’m not looking at job cuts per se and I’m not looking at plant closure per se.”
A worker carries out a final inspection on new Volkswagen ID.3 electric cars at the Volkswagen factory in Dresden on May 14, 2025.
Sean Gallup | Getty Images News | Getty Images
He continued: “We want to reduce our cost structure, increase productivity and increase the capacity utilization of our plants. And if there are better options, we will of course look into it.”
Antlitz said it would be “much better” for the company to find an alternative solution to plant closures.
“An unprecedented risk scenario”
Volkswagen announced in April that it would halt production of the ID.4 electric sports utility vehicle at its Tennessee plant amid a difficult U.S. environment for electric vehicles.
Volkswagen boss Blume said on Friday that the company had managed to offset “continued unavoidable headwinds” worth tens of billions of euros.
“At the same time, the environment for the automotive industry remains extremely challenging: geopolitical crises, trade conflicts, high regulatory requirements, volatile markets and increased competition,” Blume said in a statement.
“In an unprecedented risk scenario, the Volkswagen Group is entering the next phase of its transformation – from a position of strength and with a clear understanding of the opportunities ahead,” he added.
