- Volkswagen AG
- 10 March 2026 09:43:44
Source: Sharecast
Europe’s largest carmaker said operating profit fell more than half to €8.9bn in 2025, down from €19.1bn a year earlier, while revenue remained broadly stable at €321.9bn compared with €324.7bn in 2024.
The operating margin declined to 2.8%, reflecting the impact of US tariffs, currency movements and costs linked to adjustments in Porsche’s product strategy, which had slowed its transition to electric vehicles.
Reuters reported that the result missed analysts’ expectations of €9.4bn.
Adjusted for restructuring and other special items, Volkswagen said operating profit reached €14.8bn, equivalent to a margin of 4.6%.
Chief financial officer Arno Antlitz said the group had launched 30 new models and made progress on restructuring during a year marked by “geopolitical tensions, tariffs and intense competitive pressure,” but warned that the adjusted margin “is not sufficient in the long run.”
Vehicle deliveries totalled about nine million units in 2025, broadly unchanged from the prior year.
Sales increased in Europe by 5% and in South America by 10%, but fell 12% in North America and 6% in China amid intensifying competition in the world’s largest car market.
Despite the earnings pressure, Volkswagen reported stronger-than-expected cash generation in its core automotive division.
Net cash flow rose 24% to €6.4bn, helped by reduced working capital and tighter investment discipline, while net liquidity at year-end remained stable at €34.5bn.
The Financial Times said the figure significantly exceeded earlier company forecasts of around zero cash flow and reflected lower-than-expected capital spending and research and development costs.
The company said it was stepping up cost-cutting efforts as it grappled with weakening demand in China, rising production costs in Europe and higher US tariffs.
Volkswagen had already agreed plans to cut tens of thousands of jobs in Germany and reduce production capacity as part of a broader restructuring aimed at delivering about €6bn in savings by the end of the decade.
Porsche, one of Volkswagen’s key brands, also weighed heavily on group results.
The company recorded a €4.7bn impairment linked to changes in Porsche’s electrification strategy, after the sports-car maker slowed its shift to fully electric models amid weaker demand.
Volkswagen said it would propose a dividend of €5.26 per preferred share and €5.20 per ordinary share for 2025, a reduction of about 17% from the previous year.
Looking ahead, the group forecast only modest improvement in 2026, expecting revenue growth of between 0% and 3% and an operating margin of 4% to 5.5%.
Analysts polled by Visible Alpha expect a margin of about 5.2%, near the top end of the company’s range, Reuters reported.
Chief executive Oliver Blume said the company was entering “the next phase of our transformation” as it adapted to a “fundamentally different environment,” with plans to launch more affordable electric vehicles, expand its regional footprint and accelerate developments in batteries, software and autonomous driving.
At 1018 CET (0918 GMT), shares in Volkswagen AG were up 3.36% in Frankfurt at €92.30.
Reporting by Josh White for Sharecast.com.