German automotive group Volkswagen recorded a sharper decline in performance in the first quarter than analysts expected. Operating profit fell by 14.3% year-on-year to €2.5 billion, while revenue dropped to €75.7 billion. The results were affected by higher US tariffs, geopolitical uncertainty, and growing pressure from Chinese competition.
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Results fell short of market expectations
Analysts polled by Visible Alpha had assumed that Volkswagen’s operating profit would remain at the level of €2.9 billion. However, the actual result was lower and showed that the automaker is facing a combination of cost pressures and weaker demand in key markets.
The group’s revenue in the period from January to March decreased by 2.5% to €75.7 billion. Here too, the result fell short of analysts’ estimates, who had expected revenue of €77.6 billion.
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Volkswagen plans further savings
Chief Executive Oliver Blume is continuing cost-cutting measures across the entire group. The group, which also includes Škoda Auto, must absorb billions in costs related to tariffs while also responding to weaker demand in China and the United States.
By 2030, approximately 50,000 jobs are to be eliminated across the entire group. Consolidated profit after tax in the first quarter fell by 28.4% year-on-year to €1.56 billion.
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Source: ČTK
