WASHINGTON (dpa-AFX) - German automotive major Volkswagen AG reported Friday lower profit in its second quarter as production and sales volume were hurt, mainly by China. However, sales revenues were higher than last year.
Going ahead, the firm said it stays on track in challenging environment and expects improved margin in the second half of the year. Further, the firm maintained fiscal 2026 margin view, but trimmed revenue growth forecast.
On the XETRA in Germany, the shares were losing around 0.34 percent, trading at 73.60 euros.
Oliver Blume, CEO Volkswagen, stated, 'For the full year, we expect a robust performance above the prior year in a challenging environment - even though our operating result in the first half was around 12 percent below the prior year. Globally, we delivered more cars than in the previous year - excluding the Chinese market, which slumped by 20 percent.'
Meanwhile, noting that the first-half operating margin of 3.8 percent remains too low, CFO and COO Arno Antlitz added, 'In an environment where the Chinese total market is down by 20 percent and Chinese competitors are increasing exports and thereby competitive pressure in Europe, the currently planned initiatives are not sufficient.'
He said the firm is required to accelerate efforts to structurally lower cost base and sustainably improve earnings quality.
Looking ahead, Volkswagen continues to expect operating return on sales target between 4.0 and 5.5 percent for 2026.
Meanwhile, the firm adjusted its 2026 sales revenue outlook to a range of negative 3 to 0 percent compared with the previous year, revised from the earlier guidance of 0 to positive 3 percent.
In the Automotive Division specifically, the company continues to target an investment ratio of between 11 and 12 percent in 2026.
In the second quarter, earnings after tax reached 1.538 billion euros in the second quarter, representing a 32.9 percent decline from 2.291 billion euros in prior period.
Earnings before tax totaled 2.538 billion euros, down 23.4 percent from 3.314 billion euros a year ago.
The operating result fell 9.5 percent year-over-year to 3.469 billion euros, and operating return on sales dropped to 4.2 percent from 4.7 percent in the previous period.
Sales revenue reached 82.444 billion euros, up 2.0 percent from 80.806 billion euros in the prior year. However, vehicle delivery volumes declined significantly.
Customer deliveries totaled 2.077 million units, down 8.6 percent, while vehicle sales reached 2.043 million units, representing a 9.7 percent decrease. Production volumes fell 13.4 percent to 2.014 million units from to 2.325 million units in the previous year.
Orders for all-electric vehicles in Europe increased more than 50 percent in the second quarter.
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