VW profit plunges by a third in second quarter amid weak sales

Volkswagen Group's profits continued to slide in the second quarter, with net earnings falling by 32.9% to 1.54 billion euros. This marks a significant downturn for Europe's largest automaker, which had already seen a 36% profit decrease in the same period last year. The company's struggles are largely driven by weak sales, especially in the crucial Chinese market, where deliveries plummeted by more than a third to 424,300 vehicles. While sales outside China showed a slightly better performance, the overall decline highlights persistent challenges.

Facing headwinds from tariffs, wars, geopolitical tensions, and intensifying competition, Volkswagen CEO Oliver Blume is pushing for aggressive cost-saving measures. These plans include a review of up to 50,000 jobs worldwide and four German plants, in addition to the 50,000 jobs already slated for elimination by 2030. However, these proposed cuts are meeting strong resistance.

The plans have drawn significant opposition from labor unions and works councils, as well as the state of Lower Saxony, which holds a 20% stake in VW and has two representatives on the supervisory board. Together, these stakeholders hold a majority on the board, and reports indicate the cost-cutting plans were initially rejected in that forum. The company has already announced the reduction of 50,000 group-wide jobs by 2030, with 35,000 expected to be cut from the core brand alone, and the remainder from subsidiaries like Audi and Porsche. Over 37,000 employees have already signed agreements related to these cuts.