Volkswagen sees flat profit margin this year as costs weigh

Victoria Waldersee

Mon, Mar 10, 2025, 11:32 PM 2 min read

By Victoria Waldersee

WOLFSBURG, Germany (Reuters) -Volkswagen, Europe's apical carmaker, expects astatine champion a flimsy summation successful its 2025 operating nett margin, it said, joining rivals successful giving a subdued outlook for the twelvemonth up arsenic the assemblage battles anemic request and simmering commercialized tensions.

Like different European automakers, Volkswagen is attempting to nutrient much affordable EV models to drawback up with cheaper Asian rivals, contempt facing importantly higher manufacturing costs, a occupation it is trying to tackle via a heavy cost-cutting drive.

The group's operating borderline is expected successful a scope of 5.5% to 6.5%, compared with 5.9% successful 2024, with a nett currency travel outlook successful the automotive part of conscionable 2 cardinal to 5 cardinal euros ($5.45 billion) - compared with 5.0 cardinal euros successful 2024.

"We cannot beryllium satisfied with this fiscal outlook," concern main Arno Antlitz said connected Tuesday according to the precocious substance of a speech.

"It reflects the existent challenges successful the planetary system and an manufacture that is successful the midst of a cardinal transformation," helium added, pointing to the precocious costs of ramping up its battery-electric conveyance scope and artillery compartment output.

The outlook for 2025 does not origin successful the imaginable interaction of commercialized tariffs threatened by U.S. President Donald Trump connected imports from Mexico oregon Europe, Antlitz said.

The Volkswagen Group is heavy exposed to Trump's tariff plans for Mexico and Canada arsenic its Audi and Porsche divisions person nary U.S. manufacturing base. The VW rider car brand's U.S. income dwell chiefly of imports from its Mexican works portion batteries were acceptable to travel from a compartment works nether operation successful Canada.

Ferdinand Dudenhoeffer, caput of the CAR deliberation vessel astatine the University of Duisburg-Essen, said Volkswagen was excessively focused connected Germany with its precocious costs, and had bigger problems up peculiarly for its Porsche and Audi brands.

"Donald Trump and his tariff wars volition not marque the concern immoderate easier for Porsche and Audi... further burdens are to beryllium expected," helium said.

Shares successful Volkswagen, which person fallen by much than 40% implicit the past 4 years, were up 2.3% successful aboriginal trade, with analysts and traders saying the precocious extremity of the borderline outlook was supra the consensus.

The radical projected a dividend of 6.36 euros per penchant stock for 2024, down from 9.06 euros paid retired for the erstwhile year, reflecting ongoing savings efforts pursuing large occupation and capableness cuts announced successful December.

Its five-year concern program for 2025 to 2029 totals 165 cardinal euros, 15 cardinal euros little than the anterior round, it said.