Volkswagen Group suffers a sharp profit slump in the third quarter

Automotive industry Profit slump at VW worse than expected

2024-11-11 Source: dpa 1 min Reading Time

VW is selling fewer vehicles, and the savings strategy initially costs money. A deficit in the most recent quarter was expected, but not to the extent now published.

VW CEO Oliver Blume has set the red pencil in the group.(Image: Volkswagen AG) — VW CEO Oliver Blume has set the red pencil in the group.
(Image: Volkswagen AG)

The struggling Volkswagen Group suffered a sharp profit slump in the third quarter. A weak industry environment with fewer vehicle sales, as well as the initiated capacity and job cuts within the group, led to a billion-dollar burden.

The figures were weaker than analysts had feared. The group's profit fell by 64 percent after taxes to 1.58 billion euros—partly because VW is also faring poorly in the important Chinese market. In contrast, revenue fell by only half a percent to 78.5 billion euros.

The annual forecast, which was lowered again in September, was upheld by the management team around CEO Oliver Blume. Blume has wielded the red pencil in the group and wants to save billions to get the particularly low-margin core brand VW passenger cars back on track.

According to the works council, the board wants to close at least three German VW plants and downsize the rest, with tens of thousands of employees likely to be laid off. Significant salary cuts are also on the table.

The employees have announced fierce resistance and are demanding more comprehensive strategies than just focusing on labor and factory costs. This Wednesday, the company and the IG Metall union will meet for the next round of talks on the VW company wage agreement.

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