Fierce competition in the Chinese market and US tariffs continue to weigh heavily on Volkswagen, the automotive giant based in Wolfsburg. In the first quarter from January to March, the Group's profit fell by 28.4 percent compared to the same period last year, dropping to €1.56 billion, VW announced on Thursday. Revenue declined by 2.5 percent to €76 billion.
Volkswagen sold approximately two million vehicles in the three months, around seven percent fewer than in the first quarter of 2025. CFO Arno Antlitz emphasized that Volkswagen also "made further progress" in the first quarter: order intake in Europe improved, the company's China strategy is advancing, and costs were reduced by nearly one billion euros. Despite this progress, the margin remains "at a far too low level," he stated.
Antlitz explained that the world has "changed significantly" in the past year and a half: tariffs have been introduced, competition in China continues to intensify, and Chinese manufacturers are increasingly exporting competitive pressure to Europe. "In this environment, the planned cost reductions are not sufficient. We must fundamentally change our business model and achieve structural, sustainable improvements."
Volkswagen plans to improve the cost structure of vehicles in the coming months, "significantly" reduce costs, increase factory efficiency, and accelerate technology development and decision-making. VW CEO Oliver Blume stated that the company will align products, technologies, and value creation "even more regionally."
Last year, Europe's largest automaker already saw its profit collapse by almost half. At €6.9 billion, the total stood at its lowest level since the diesel scandal in 2016. To save costs, VW plans to cut a total of 50,000 jobs by 2030.
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