Volkswagen Sees Sharp Decline in First Quarter Profit

(MENAFN) Volkswagen Group, the German auto powerhouse, saw its operating profit plummet by 37% in the first quarter of 2025. The company cited reduced demand in China, rising operational costs, and overcapacity at its European plants, despite a slight increase in sales revenue.

The group, which includes brands such as Audi, Bugatti, Seat, Skoda, and Porsche, reported a 2.8% year-over-year rise in sales revenue, reaching €77.56 billion. This growth was fueled by higher vehicle sales outside of China.

However, operating profit dropped to €2.87 billion, while net profit fell 40.6% to €2.2 billion. Pre-tax profit also saw a significant decline of 40%, amounting to €3.1 billion.

Volkswagen attributed the downturn to restructuring costs, rising battery prices for electric vehicles, and reduced sales in its key market, China.

The company also highlighted several external challenges, including political instability, growing trade barriers, geopolitical tensions, heightened competition, and volatile commodity and currency markets. Additionally, stricter emissions regulations are expected to add further pressure.

Despite these obstacles, Volkswagen's vehicle deliveries saw a modest increase of 0.9% year-over-year, totaling 2.1 million units for the January–March period.

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