Volkswagen scraps revenue growth forecast as tariffs, China weigh

Berlin: Volkswagen no longer expects ​revenue to grow this year, the ​company said on Friday, scrapping its previous forecast and setting the stage for a radical overhaul to shield the ‌group against ⁠costly ⁠tariffs and intensifying competition from China.

The announcement came with ​second-quarter results showing a 9.5% profit slump, with CEO Oliver Blume ​pushing for a radical restructuring of the company, including a proposed 100,000 job cuts, to make ​it more cost-competitive.

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Volkswagen now expects ⁠a decline ‌of up to 3% in ​sales revenue ​this year, having previously forecast growth ⁠of up to 3%. The company maintained its ​forecast for an operating margin in the ​range of 4.0 to 5.5%.

The German auto group, which includes subsidiaries Porsche and Audi, reported a operating profit of €3.5 billion ($3.98 billion) in the April-to-June period.

Analysts had expected a slight ‌improvement on the same quarter last year, forecasting a €3.9 billion result in a ​poll conducted by ​Visible Alpha.

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The ⁠group managed to offset "continued unavoidable headwinds in the double-digit billions" in the first half of 2026, Blume said.

"At the ​same time, the environment for the automotive industry remains extremely challenging," he said, pointing to geopolitical crises, trade conflicts, high regulatory requirements, volatile markets and intensified competition.