by Volkswagen claims progress, but the numbers show the company is still overcoming serious obstacles. The German giant cut costs and improved cash flow, but profits and sales are moving in the wrong direction.
First quarter financial results
In the first quarter, the Volkswagen Group reported revenue of 75.7 billion euros ($88.3 billion), slightly lower compared to the same period last year. At the same time, operating profit fell more than 14% — to 2.5 billion euros ($2.9 billion). This is not a catastrophe, but it is not the result VW was hoping for either.
Reasons for the decline
The company explains this as a combination of several factors. Tariffs are causing significant damage, especially in the US, while demand is weakening in key markets. China remains the biggest problem, where deliveries fell by 20%. North America also did not help, showing a 9% decline.
Positive aspects
There are positive news too, besides the rapid launch of new products like the ID. Polo. VW reduced overhead costs by approximately 1 billion euros ($1.17 billion) and made automotive cash flow positive at 2 billion euros ($2.34 billion), which is a significant improvement compared to last year. Orders in Europe also grew by about 15%, indicating that customers like VW’s new models, even if Chinese buyers are not as active.
Division results
An analysis of the divisions gives a clearer understanding of what is working and what is not. The Core group, which includes the mass brands VW, Skoda, and Seat, showed a strong quarter. Operating profit rose to 1.5 billion euros ($1.75 billion), an increase of 38%, thanks to better cost control and improved product pricing.
VW Group financial results for Q1
| Q1 ’26 | Q1 ’25 | % Change | |
| Sales Revenue | 75,657 | 77,558 | -2.5 |
| Operating Result | 2,463 | 2,873 | -14.3 |
| Operating Return on Sales (%) | 3.3 | 3.7 | |
| Profit Before Tax | 2,235 | 3,109 | -28.4 |
| Return on Sales Before Tax (%) | 3.0 | 4.0 | |
| Profit After Tax | 1,564 | 2,186 | -28.4 |
The Progressive group, which includes Audi, Bentley, Lamborghini, and Ducati, recorded a decline in revenue but still managed to slightly increase profit. The situation is more difficult in the Sport Luxury division. Porsche profits fell by 22% due to a decline in sales volumes of almost 15% and the impact of tariffs. The VW software division CARIAD, whose mistakes caused the delay of the Macan Electric launch several years ago, remains unprofitable, though losses are decreasing as development progresses.
Future plans
Overall, VW is clearly optimizing its operations, but management acknowledges that more needs to be done. Arno Antlitz, CFO and COO of the VW Group, noted that the company’s operating profit “remains too low at 4.3%” and that “the planned cost reduction is not enough.”
Antlitz states that Volkswagen will spend the coming months simplifying its product portfolio, technology platforms, and the entire decision-making process to achieve greater savings. We will have to wait to see what this means, as VW did not provide details, but it could lead to some models or versions being discontinued and others being moved to countries with cheaper labor.
VW Q1 by Brand Group
| Vehicle Sales | Sales Revenue | Operating Result | Operating Margin | |||||
| Thousand vehicles/ million euros | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 |
| Core Group | 1,227 | 1,224 | 34,874 | 35,340 | 1,541 | 1,118 | 4.4 | 3.2 |
| Progressive Group | 260 | 277 | 14,178 | 15,431 | 588 | 537 | 4.2 | 3.5 |
| Sport Luxury Group¹ | 59 | 65 | 7,381 | 7,819 | 517 | 678 | 7.0 | 8.7 |
| CARIAD | – | – | 389 | 237 | -420 | -755 | – | – |
| Batteries | – | – | 12 | 2 | -230 | -213 | – | – |
| Truck Group | 69 | 73 | 9,780 | 10,326 | 40 | 640 | 0.4 | 6.2 |
| Companies in China² | 494 | 610 | – | – | – | – | – | – |
| Volkswagen Group Mobility | – | – | 15,831 | 14,866 | 868 | 948 | 5.5 | 6.4 |
| Other³ | -155 | -149 | -6,788 | -6,464 | -441 | -81 | – | – |
| Volkswagen Group | 1,954 | 2,100 | 75,657 | 77,558 | 2,463 | 2,873 | 3.3 | 3.7 |
VW
The situation surrounding Volkswagen demonstrates how global economic challenges, including trade wars and changing consumer preferences, affect even the largest market players. Although the company managed to stabilize its financial position through cost reduction, the key issue remains its ability to adapt to new realities, especially in China, where local manufacturers are rapidly increasing their market share. Further simplification of the model range and production optimization could be decisive factors for restoring growth, but without a significant breakthrough in electrification and software, VW’s long-term prospects remain uncertain.
