Volkswagen’s Profits Fall as China’s Demand Declines
(MENAFN) Volkswagen Group, the prominent German carmaker, experienced a steep 37 percent decline in operating earnings during the first quarter of 2025.
The company pointed to diminishing demand in China, escalating production expenses, and excessive manufacturing capacity in its European plants as primary causes, despite a slight rise in sales income.
The automotive conglomerate, which encompasses well-known brands such as Audi, Bugatti, Seat, Skoda, and Porsche, announced a 2.8 percent year-over-year increase in sales income, reaching EURO77.56 billion.
This improvement was largely due to stronger vehicle demand outside the Chinese market.
Nevertheless, operational profit shrank to EURO2.87 billion, while bottom-line earnings tumbled by 40.6 percent, falling to EURO2.2 billion.
Pre-tax earnings also experienced a steep 40 percent reduction, amounting to EURO3.1 billion.
Volkswagen linked the earnings setback to costs associated with corporate restructuring, rising prices for electric vehicle batteries, and a drop in purchases in China, its most crucial market.
According to a corporate statement, the automaker expects further challenges, stemming from an atmosphere marked by “political uncertainty, increased trade restrictions and geopolitical tensions,” along with intensified competition, unstable prices in commodities, energy, and currencies, and more stringent emissions regulations.
In spite of these pressures, the number of vehicles delivered edged up by 0.9 percent compared to the same period the previous year, totaling 2.1 million units between January and March.
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