Volkswagen cuts 2026 sales forecast after Q2 profit miss

Volkswagen on Friday abandoned its revenue growth forecast for 2026, now expecting sales to fall by as much as 3% after second-quarter operating profit dropped 9.5%, as Europe's largest automaker faces a deepening crisis in China and escalating trade headwinds.wmbdradio+1

The company had previously projected growth of up to 3% in sales revenue for the year. CEO Oliver Blume said the reversal sets the stage for a radical restructuring that could include up to 100,000 job cuts to make the group more cost-competitive.wmbdradio

Q2 Results Miss Expectations

Volkswagen reported operating profit of €3.5 billion ($3.98 billion) for the April-to-June period, below the €3.9 billion analysts had forecast in a poll by Visible Alpha. The group maintained its full-year operating margin guidance of 4.0% to 5.5%.wmbdradio

Blume said the company managed to offset "continued unavoidable headwinds in the double-digit billions" in the first half of 2026, but warned that "the environment for the automotive industry remains extremely challenging," citing geopolitical crises, trade conflicts, and intensified competition.wmbdradio

China Freefall Accelerates

The results follow data released earlier this month showing Volkswagen's Q2 global deliveries fell 8.6%, their steepest quarterly decline since 2022. China, once the automaker's largest and most profitable market, saw deliveries plunge 36.6% in the quarter, far outpacing modest gains of 7.7% in North America and 1.8% in Western Europe.reuters+1

The collapse in China reflects growing dominance by domestic electric vehicle makers like BYD and Geely, which have undercut European rivals on price and technology.

Restructuring Battle Intensifies

The forecast cut lands amid an escalating fight over the company's future. Earlier this month, Volkswagen's supervisory board met to discuss proposals to close four German factories — in Hanover, Emden, Zwickau, and Audi's Neckarsulm site — and slash the model lineup by up to 50%. Production capacity would shrink to nine million vehicles per year from 10 million currently.reuters+1

The 100,000 job cuts now being pushed by Blume would be roughly double the 50,000 previously announced across Volkswagen, Porsche, and Audi by 2030. Labor representatives have resisted, and a late-2024 union agreement bars compulsory redundancies until the end of 2030.youtube+1

"We are now in the phase of making our structures fit for the future," Blume told investors at the company's annual meeting last month. The half-year results released Friday underline just how urgent that task has become.qz