VW Profit Drops by a Third in Second Quarter

Volkswagen's financial struggles continue as the automaker announced a significant 32.9% decline in its net profit for the second quarter. The profit after taxes fell to 1.54 billion euros, a stark contrast to the 2.29 billion euros earned in the same period last year. This marks a continued downward trend, as the company had already reported a 36% profit decrease in the second quarter of 2025 compared to the previous year.

The global deliveries of Volkswagen vehicles also saw a considerable drop, decreasing by almost 9% to 2.08 million units. The crucial Chinese market proved particularly challenging, with sales plummeting by more than a third to 424,300 vehicles. While sales outside of China showed a slightly better performance, the overall figures reflect mounting pressure on the company.

Volkswagen Group CEO Oliver Blume has cited tariffs, wars, geopolitical tensions, and intensifying competition as headwinds. In response, he is planning further austerity measures. These include potentially cutting up to 50,000 jobs worldwide and reviewing four German plants. This comes on top of an existing plan to reduce 50,000 jobs by 2030, with 35,000 of those cuts targeted at the core VW brand and the remainder at subsidiaries like Audi and Porsche.

However, these proposed savings measures are meeting stiff resistance. The IG Metall trade union and the works council have voiced strong opposition. The state of Lower Saxony, which holds a 20% stake in VW and has two seats on the supervisory board, is also aligned with the workers' representatives. Together, they form a majority on the board, and reports indicate that the new austerity plans were initially rejected in this body. This opposition highlights the significant internal and external challenges Volkswagen faces as it navigates its current crisis.