Volkswagen CEO warns deeper cost cuts needed as China competition mounts

Volkswagen must deepen cost cuts to remain competitive against Chinese brands increasingly taking aim at the German auto group’s home market, CEO Oliver Blume said on Friday following a mixed quarterly earnings report.

 

Volkswagen’s operating profit fell 9.5 per cent in the April-to-June period to €3.5 billion ($3.98 billion). With revenues of €82.4 billion, the group was able to keep its operating margin within the 4.0 per cent to 5.5 per cent target range for the full year, at 4.2 per cent in the second quarter.

 

The group maintained that profit guidance on Friday but no longer expects revenue growth, now forecasting a decline of up to 3 per cent in 2026.

 

The world’s No 2 carmaker sought to strike a balance between reassuring investors and making the case for restructuring, as it battles tariff woes, weakness in China and plots possible closures of some German plants.

 

“When we look to the future, we have more and more risks coming,” Blume said, pointing to more than 150 competitors in China.