Volkswagen profit drops 32.9% in Q2 as China sales collapse; group cuts full-year revenue forecast and plans up to 50,000 more job cuts

Profit collapse

Volkswagen's net profit after tax fell 32.9 percent to €1.54 billion in the second quarter of 2026, down from €2.29 billion in the same period a year earlier. The prior-year quarter had itself already dropped 36 percent compared with the second quarter of 2024. For the first half of 2026, group revenue reached €158 billion, roughly €300 million below the first half of 2025, while half-year profit declined almost 12 percent to €5.9 billion. The operating return on sales for the first six months stood at 3.8 percent.

The environment for the auto industry remains extremely challenging: geopolitical crises, trade conflicts, high regulatory requirements, volatile markets and intensified competition.

China deliveries collapse

Worldwide deliveries during the quarter fell nearly 9 percent to 2.08 million vehicles. The deterioration was concentrated in China, where sales plunged more than a third to 424,300 units. Outside China, the sales trend was somewhat better. For the first half of the year, group deliveries totalled 4.1 million vehicles, a decline of 6.3 percent compared with the first half of 2025.

Revenue forecast slashed

The group cut its full-year revenue outlook. Instead of growth of up to 3 percent versus the prior year, Volkswagen now expects revenue to range between a decline of 3 percent and flat. The forecast for the operating return on sales was maintained at 4 to 5.5 percent. CEO Oliver Blume said he still expects a "robust result above the prior-year level."

We must increase our efforts to structurally reduce our cost base and sustainably improve our earnings quality.

Job and plant cuts on the table

Management has presented new savings plans that put up to 50,000 additional jobs worldwide and four German plants under review. These come on top of the 50,000 positions in Germany already slated for elimination by 2030, of which 35,000 are at the core Volkswagen brand. More than 37,000 employees have already signed corresponding agreements. The works at Zwickau, Emden, Hanover and the Audi plant in Neckarsulm are considered at risk.

Supervisory board pushback

The supervisory board rejected the latest proposals in an initial session, according to reports. The state of Lower Saxony, which holds a 20 percent stake in Volkswagen and has two seats on the board, opposes further cuts, as do the works council and the IG Metall union. Together with employee representatives, they hold a majority on the board. Further talks are scheduled for September.

Porsche bucks the trend

Porsche, the group's sports-car subsidiary, increased its operating result by one-third to €1.35 billion in the first half, up from €1.01 billion a year earlier, despite a further decline in deliveries. The Stuttgart-based manufacturer plans to inform staff and the public next week about a second package of job cuts. Media reports indicate at least 5,000 positions are to be eliminated in the coming years, following a previously agreed reduction of 3,900 jobs.