Achtung! VW cuts sales forecast as auto industry remains 'extremely challenging'

Volkswagen (VWAGY) chopped its full-year gross outlook connected Friday, claiming the situation for the car manufacture arsenic a full was "extremely challenging." 

The world's second-largest carmaker present expects 2026 income gross to beryllium level oregon down 3% compared to past year, down from a anterior forecast of level to 3% growth. It held its operating-margin people astatine 4.0% to 5.5% and near nett currency travel and liquidity guidance unchanged.

The reset came alongside a mixed 2nd quarter. Group income gross roseate 2.0% to €82.4 cardinal ($93.9 billion) — but that summation was driven by its fiscal services part and higher pricing. Vehicle income fell 9.7% to 2.04 cardinal units, and accumulation dropped 13.4% to 2.01 million.

VW's operating effect (similar to EBIT) fell 9.5% to €3.47 cardinal ($3.96 billion), with operating borderline falling to 4.2% from 4.7% a twelvemonth ago.

"Applying disciplined outgo management, we person managed to offset continued unavoidable headwinds successful the double-digit billions," CEO Oliver Blume said successful a statement. "At the aforesaid time, the situation for the automotive manufacture remains highly challenging: geopolitical crises, commercialized conflicts, precocious regulatory requirements, volatile markets and intensified competition."

Automotive nett currency travel swung to a affirmative €1.17 cardinal ($1.33 billion) successful the quarter, from an outflow of €523 cardinal ($596 million) a twelvemonth earlier, but it was mostly the effect of little investment, reduced taxation payments, and working-capital timing.

China continues to beryllium a worrying inclination for VW. While wide radical deliveries fell 8.6% worldwide successful the quarter, China income plunged 36.6% to 424,300 vehicles, against gains of 7.7% successful North America, 9.4% successful South America, and 2.5% successful Europe. 

CFO Arno Antlitz said the Chinese full marketplace is down 20% and warned that Chinese rivals "are expanding exports and thereby competitory unit successful Europe."

In addition, Volkswagen listed US tariffs, US commercialized barriers, and worldwide regularisation among the "external forces" squeezing European producers, and named US tariffs arsenic 1 of 3 drags, on with peculiar items and anemic China, connected the half-year operating result. 

Interestingly the nett tariff deed successful the archetypal fractional was really a tiny summation of €0.1 cardinal ($0.1 billion), but this came aft tariff offsets and reimbursements astatine Audi and Volkswagen. 

VW's 2026 outlook assumes the existent tariff concern holds and excludes immoderate escalation successful the Middle East.

Among the brands, Porsche's operating effect jumped to €692 cardinal ($789 million) from €154 cardinal ($176 million) a twelvemonth earlier, and motortruck portion TRATON roseate to €902 cardinal ($1.03 billion). The halfway Volkswagen-Škoda-Cupra radical slipped to €2.07 cardinal ($2.36 billion) from €2.34 cardinal ($2.67 billion).