Volkswagen's Profits Drop by a Third Amid Deepening Crisis
Volkswagen reported a significant drop in profits during the second quarter of 2026, with earnings falling by 32.9% to €1.5 billion compared to €2.3 billion in the same period last year. CEO Oliver Blume described the situation as 'extremely challenging,' citing intense competition from Chinese automakers and rising costs due to U.S. tariffs under Donald Trump's policies. The company is implementing a major restructuring plan, which includes potential job cuts of up to 100,000 workers across its global operations. Sales in China have also declined by 20%, further compounding the crisis. Despite an increase in sales revenue from €80.8 billion to €82.4 billion, profits were impacted by a €500 million charge related to halting production of the electric ID.4 model in the U.S. Blume has proposed significant cost-cutting measures, including reducing car models and considering plant closures or repurposing for defense equipment manufacturing. However, these plans have faced resistance from unions and regional government officials.
Topics: competition layoffs profits tariffs turnaround plan