Volkswagen shares slide as analysts downgrade after profit warning

Volkswagen confirmed late on Friday that it now expects an operating margin of no more than 1% for 2026, a dramatic reduction from its previous guidance of 4% to 5.5%, after flagging approximately €10 billion in exceptional charges dominated by a €6 billion non-cash goodwill impairment at its Porsche Dr. Ing. h.c. F. Porsche AG division. Shares in both Volkswagen and Porsche extended their declines on Monday, with Kepler Cheuvreux downgrading Volkswagen to Hold and Porsche Automobil Holding SE to Reduce.reuters+2

The profit warning marks another chapter in what has become the largest restructuring in the 89-year history of Europe's biggest automaker. Group finance chief Arno Antlitz warned that "the market changes are profound and lasting" and "we have no time to lose," according to Bloomberg, as cited by Motor1.motor1

The Porsche Problem

The €6 billion goodwill impairment reflects Porsche's deteriorating financial position after years as one of the group's strongest profit engines. The sports car maker posted an operating margin of just 1.1% in 2025, down from around 9% in 2024, as collapsing demand in China — where deliveries fell 32% in the first half of 2026 — combined with U.S. tariffs and a costly reversal of its electric vehicle strategy. Porsche delivered 122,306 vehicles worldwide in the first half of 2026, a 16% decline year over year.autoevolution+1

German business daily Handelsblatt reported on Saturday that Volkswagen's restructuring plans call for an additional 4,100 job cuts at Porsche, on top of the 9,000 already agreed, which would bring the total to roughly 13,000 positions — nearly one in three employees — by 2035. However, Porsche CEO Michael Leiters told employees in an internal memo seen by Reuters that "there are no plans to cut an additional 4,000 jobs at Porsche".autoblog+2

Deeper Restructuring Ahead

Beyond Porsche, Volkswagen attributed its revised guidance to persistent weakness in China, where the broader market has contracted 20%, and a faster-than-expected shift toward battery-electric vehicles that is squeezing margins at both the VW and Audi brands. Roughly €2 billion in additional charges stem from restructuring costs, early retirement provisions, and write-downs on Chinese operations.finance.yahoo+2

Volkswagen brand chief Thomas Schäfer told employees at the Wolfsburg headquarters on Monday that efficiency measures agreed in 2024 had proven insufficient and the company would "once again significantly strengthen the efficiency programme". The remarks came as German auto workers staged protests across the country in response to the deepening crisis.ua

The group's supervisory board earlier this month approved Future Plan 2030, which includes cutting up to 100,000 positions group-wide and potentially halving the model lineup. Volkswagen now expects group revenue of approximately €315 billion for 2026, down from €321.9 billion in 2025. Excluding the €10 billion in special items, adjusted operating margin would be around 4%, and the company maintained its automotive net cash flow forecast of €3 billion to €6 billion.autoevolution+3

Volkswagen is due to publish interim results on October 29, while Porsche's Capital Markets Day in Weissach on October 7 will now serve as the first major test of CEO Leiters' turnaround strategy against the backdrop of the freshly disclosed writedown.automotiveworld