Volkswagen’s Financial Results in the Second Quarter
Volkswagen published its report for the second quarter, which turned out to be challenging for the company due to the impact of customs tariffs. Losses from them amounted to about $1.5 billion, which is even more than for General Motors ($1.1 billion).
During this period, the company delivered approximately 2,272,000 vehicles to the market, and its revenue amounted to $94.8 billion. However, this figure decreased by 3% compared to last year, and pre-tax profit fell by 32.9% — to $3.9 billion. Net profit decreased by 36.3%, reaching $2.7 billion.
Volkswagen noted that the results were influenced not only by tariffs but also by restructuring costs for the Audi, Cariad, and Volkswagen Passenger Cars brands, as well as expenses related to environmental regulations and foreign exchange rate fluctuations.
Company Prospects
The decrease in cash flow is partly explained by investments in shares and expenses for duties and reorganization. Despite sales growth in Europe and South America, the company recorded a decline in China and North America. Among the bright spots is high demand for new models such as the Cupra Terramar, Porsche 911, and VW ID.7 Tourer.
Expectations for 2025 were also adjusted: operating return on sales may be 4-5% instead of the previous 5.5-6.5%, and net cash flow is expected to be in the range of $1.2-3.5 billion instead of $2.3-5.9 billion. The company does not expect a quick reduction in tariffs in the US but hopes that they can eventually be reduced to 10%.
Difficult market conditions, particularly in China where competition from local manufacturers is growing, may continue to put pressure on Volkswagen’s performance. However, investments in new models and cost optimization could help the company stabilize the situation in the future.