12:33 pm, March 12, 2025
Europe’s biggest carmaker, Volkswagen, has forecast a challenging year ahead, with cost-cutting, an EV ramp-up, navigating ‘trade tensions’ and streamlining its European operations as the keys to remaining in a profitable position.
Speaking at the company’s annual results conference yesterday (Mar 11), CFO Arno Antlitz said major cost cuts underway in Germany should yield 1 billion euros in savings by year-end, offsetting a projected earnings drop of the same amount in China as the eastern market moves more towards domestic brands.
In North America – a major export market for Volkswagen brands – chief executive Oliver Blume said the carmaker is ‘waiting to see what’s on the table’ regarding Donald Trump’s tariff threats on imports from Mexico and the EU, but remains committed to boosting its market share in the United States.
He added that top brass were reviewing plans to bring the Cupra brand to some US states from 2030, doing a ‘reality check’ of how the market would develop regarding demand for electric cars.
Blume said: ‘Our intention is still there…but we cannot close our eyes to what is happening in the USA.’
The company reported that, overall, it expected a slight increase in its 2025 operating profit margin, quoting a range of 5.5% to 6.5%, but said the modest figure was partly down to its continued investment in electric vehicle manufacturing infrastructure.
Its battery subsidiary, PowerCom plans to build three plants with a combined capacity of up to 170 gigawatt hours.
The outlook for 2025 does not factor in the possible impact of trade tariffs, Antlitz added.
Operating profit fell 15% in 2024 to 19.1 billion euros against revenue of 324 billion euros, and the company proposed a dividend of 6.36 euros per preference share for 2024, down from 9.06 euros the previous year.
VW shares rose by 1.6% on the back of the announcement, with analysts and traders saying the upper end of the margin outlook was above the consensus.
‘VW has a plan for the future – which we think has some credibility,’ said analysts from Citi Bank.
