8:01 am, September 21, 2026
Volkswagen has dramatically cut its profit forecast after revealing that around €10bn of exceptional costs will hit its performance this year.
The German car giant now expects an operating return on sales of no more than 1% in 2026, having previously forecast between 4% and 5.5%.
The downgrade comes amid mounting pressure from restructuring costs, Porsche’s struggles and a deteriorating Chinese market.
Volkswagen is still expecting group sales revenue of around €315bn for the year, compared with €321.9bn in 2025.
However, around €10bn of special items are now expected to weigh on operating profit, including a €6bn non-cash impairment relating to Porsche.
The Times reported that the profit warning has deepened the challenges facing Europe’s largest car manufacturer as it battles fierce competition from Asian rivals, tariffs in the US and changing demand in its key markets.
Volkswagen confirmed the revised guidance on Friday (Sept 18), saying conditions had worsened particularly in China, while customers were shifting towards battery electric vehicles faster than expected.
That combination is expected to result in weaker-than-previously forecast performance from both the Volkswagen passenger car and Audi brands.
The group’s finance and operations boss Arno Antlitz has warned that urgent action is required.
‘We have no time to lose,’ he said.
Volkswagen’s Chinese business has been particularly badly hit, with deliveries in the country down 20% in the first half of 2026.
Antlitz said around €9bn of the €10bn in exceptional costs expected this year would land in the second half alone.
Thousands more jobs could go
The Times also reports that Volkswagen’s supervisory board has approved a major transformation programme which could result in around another 50,000 jobs being cut across the group.
Volkswagen employs around 650,000 people globally and has said further adjustments to its workforce are necessary as it attempts to lower costs and improve competitiveness.
The latest programme comes on top of existing restructuring measures and forms part of a wider overhaul of the business.
Volkswagen has already outlined plans to streamline its model range by up to 50% and reduce the complexity of its product offering by as much as 75%.
The company’s shares fell 5.6% following Friday’s profit warning, according to The Times.
Volkswagen is due to publish its results for the first nine months of 2026 on October 29.