Volkswagen workers are resisting plans to cut a further 50,000 jobs – Jens SCHLÃTER / AFP via Getty Images
Volkswagen’s profits have crashed by a third as its boss warned the carmaker faced “unprecedented risk”.
Oliver Blume said a turnaround plan that could involve laying off up to 100,000 workers was starting to bear fruit, but that the company still faced an “extremely challenging” situation.
VW profits plunged 32.9pc in the second quarter compared with a year earlier. At the same time, it warned sales were no longer expected to grow this year and predicted they could even fall by 3pc.
The grim results come as the chief executive battles to convince sceptical unions and regional government officials in Germany to back his proposals to get the carmaker back on track.
VW’s woes are being driven by tough competition from cut-price Chinese rivals – both in Asia and Europe – as well as turmoil in the US, where Donald Trump’s tariffs have driven up costs.
China was once the most profitable market for the group, which also includes Audi, Skoda, Porsche and Lamborghini, but Mr Blume admitted sales there had “slumped” by 20pc in the third quarter.
He insisted VW’s turnaround plans were “delivering results” but warned: “At the same time, the environment for the automotive industry remains extremely challenging: geopolitical crises, trade conflicts, high regulatory requirements, volatile markets and intensified competition.
“In an unprecedented risk scenario, Volkswagen Group enters the next phase of its transformation – from a position of strength and with a clear understanding of the opportunities ahead.”
VW said profits for the three months to the end of June were €1.5bn (£1.3bn), down from €2.3bn during the same period in 2025. That was despite sales ticking up from €80.8bn to €82.4bn.
The drop in profits included a €500m charge booked for stopping production of the electric ID.4 car in the US, where President Trump has wound back support for electric cars.
Mr Blume has repeatedly warned that VW’s current headcount of more than 650,000 was “no longer sustainable” and that the car maker must slim down to become competitive again.
In a letter to staff earlier this month, Mr Blume warned that to make the necessary savings either 50,000 more jobs would have to go – on top of 50,000 already being cut – or workers would have to accept pay cuts again.
VW has also revealed plans to axe half its car models in a drive to cut costs.
Factories in Emden, Hanover, Zwickau and Neckarsulm, which churn out some 750,000 cars a year between them, are also under threat of closure.
Mr Blume has stressed he is holding out for “smart solutions” to keep the plants running, with the company considering using them to build defence equipment.