Volkswagen Q2 Profit Slump, 2026 Revenue Outlook Cut

Volkswagen reported a second-quarter profit decline driven by weak production and lower sales volumes, with net income of 1.538 billion euros, down about a third from a year earlier. Despite a 2% rise in revenue to 82.4 billion euros, deliveries fell roughly 8-10% and production dropped about 13%, underscoring ongoing demand and volume pressures. The group kept its 2026 operating margin target of 4.0%-5.5% but trimmed its 2026 revenue outlook to a decline of up to 3% (from earlier guidance for flat to up). In a broader restructuring push, VW signaled a radical overhaul that could include roughly 100,000 job cuts to boost cost-competitiveness, while maintaining a long-run investment rate target of 11%-12% in its Automotive division. Executives cited a challenging external environment—geopolitical tensions, trade conflicts, stringent regulation, volatile markets and intensified competition, notably from China—as reasons for the weaker outlook. In the first half of 2026, VW posted revenue of 158.1 billion euros and profit of 5.9 billion euros, with an operating margin of 3.8%, highlighting a margin resilience but persistent headwinds.