Volkswagen’s Q1 profit drop spurs further cost-cutting measures

[BERLIN] Volkswagen must fundamentally overhaul its business as tariffs, geopolitical shocks and weak car demand batter the industry, the automaker said on Thursday (Apr 30), with a sharp first-quarter profit drop underscoring the urgency.

Finance chief Arno Antlitz said: “In this environment, the cost-cutting measures planned so far are not enough.”

As the company presented its quarterly results, he called for further steps to secure the German group’s future.

Volkswagen reported an unexpected 14 per cent fall in Q1 operating profit to 2.5 billion euros (S$3.7 billion).

Analysts had expected profit to be broadly flat, going by a Visible Alpha poll.

The group, which includes Porsche and Audi, has been hit by steep US tariffs expected to cost about four billion euros a year, and is battling to arrest sliding sales in China and the United States.

Around 50,000 jobs are already to be cut across the group in Germany by 2030.

The Wolfsburg-based company posted quarterly revenue of 75.7 billion euros, down 2.5 per cent and below analysts’ estimate of 77.6 billion euros, translating into an operating margin of 3.3 per cent.

Volkswagen forecasts an operating margin that will be between 4 and 5.5 per cent in 2026, after 2.8 per cent in 2025.

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The group confirmed its full-year guidance but warned that it did not factor in a potential escalation in the Middle East conflict, which could hit demand and drive up raw material costs globally. REUTERS