Loss in the billions

Volkswagen has to lower its forecast again

The Volkswagen Group is in dire straits.

(Bild: AFP/RONNY HARTMANN)

The next piece of bad news: the struggling Volkswagen Group is again lowering its outlook for the current financial year. The Wolfsburg-based company expects to sell even fewer cars.

Instead of an increase in deliveries of up to three percent compared to the previous year's figure of 9.2 million vehicles, the Wolfsburg-based company now only expects to sell around 9 million vehicles, as VW announced on Friday after the close of trading. After 322 billion euros in sales in the previous year, the Group was originally aiming for an increase of five percent - now it is likely to be only 320 billion euros.

Group CEO Oliver Blume also expects profitability to be weaker: he now estimates the operating result at 18 billion euros and thus an operating profit margin of around 5.6 percent. The company had previously forecast a return on sales of 6.5 to seven percent.

Negative streak continues
VW had already lowered its earnings forecast in July due to expected costs for the Audi plant in Brussels, which was on the brink of collapse. The Volkswagen preference share lost 3.2 percent after the close of trading on Friday on the Tradegate trading platform compared to the Xetra close.

The Group justified the lowered forecast with weaker than expected results for the VW core brand, VWN light commercial vehicles and the components division. In the case of the core brand, the company currently intends to massively expand its austerity measures and has terminated the employment protection that has been in place for decades; redundancies and plant closures are under discussion. The economic environment and weaker development in the financial services sector are also having a negative impact, according to VW.