Volkswagen dropped from Euro Stoxx 50 as profit crisis deepens

Volkswagen on Friday issued a sweeping profit warning, cutting its 2026 operating margin forecast to at most 1% from a previous range of 4% to 5.5%, after flagging roughly €10 billion ($11.5 billion) in one-off charges dominated by a €6 billion non-cash goodwill impairment at its Porsche Dr. Ing. h.c. F. Porsche AG division. The warning deepens a crisis at the world's second-largest automaker that has already triggered the group's biggest-ever restructuring.reuters+1

By Monday, Volkswagen had also been ejected from the Euro Stoxx 50 blue-chip index for the first time in 15 years, replaced by Nokia ↘ 1.76% in an annual review by index compiler Stoxx that took effect at the market open on September 21.afr+1

Porsche Write-Down and China Weakness

The impairment was triggered after Porsche updated its long-term financial plans, prompting Volkswagen to revise the assumptions underpinning the sports car maker's enterprise value, including its medium-term margin corridor of 10% to 15%. The charge will be recorded against third-quarter operating profit.finance.yahoo+1

Volkswagen attributed the revised guidance to persistent weakness in China combined with a faster-than-expected shift toward battery-electric vehicles, with particular impact on Audi and the VW Passenger Cars brand. Additional restructuring expenses from expanded early retirement provisions and the planned sale of VW Osnabrück are also expected, together cutting results by around €2 billion in the second half of the year.volkswagen-group+1

Market Fallout

Volkswagen shares fell more than 5% on Friday when the warning was disclosed shortly before the German market close, according to The Wall Street Journal. On Monday, selling continued: Volkswagen was down 2%, Porsche dropped 2.8%, and Porsche SE — Volkswagen's largest shareholder, which also cut its own outlook Friday — declined 3.5%, according to Reuters.globalbankingandfinance+1

The stock has now fallen more than three-quarters from levels reached during the 2021 rally to roughly a 16-year low, according to the Financial Times.afr

Restructuring Ahead

Earlier this month, Volkswagen's supervisory board approved Future Plan 2030, which includes a further group-wide reduction of approximately 50,000 positions, including management roles. German newspaper Handelsblatt separately reported that Volkswagen regards a further 4,000 roles at Porsche as surplus to requirements. Volkswagen is due to publish interim results for the period ending September 30, 2026, on October 29.finance.yahoo