Scrap metal on a barge near the Volkswagen AG factory in Wolfsburg, Germany, Tuesday, March 10, 2026.
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german volkswagen On Tuesday, it reported a sharp decline in annual operating profit, hinting at an even tougher year ahead as the auto giant continues to contend with U.S. tariffs and competition in China.
Europe’s largest automaker posted operating profit of 8.9 billion euros ($10.4 billion) in 2025, down 53% from the previous year, due to U.S. tariffs, currency effects and Porsche’s strategic shift. Analysts had expected full-year operating profit of 9.4 billion euros, according to LSEG consensus data.
Full-year sales will remain stable at nearly €322 billion compared to €324.7 billion in 2024, with a relatively modest sales growth outlook for 2026. Volkswagen said it expects sales to range from 0% to 3% this year, lower than analysts expected.
The company also said it expects operating margins to range from 4% to 5.5% in 2026, after 2.8% in 2025, down from 5.9% in the same period last year.
Arno Antlitz, Volkswagen’s chief operating officer and chief financial officer, said 2025 will be a “very difficult” year, but said the company remains “well positioned” in Europe.
“Despite increased competition in China, we have increased our market share slightly. We achieved market share of 25% and over 27% in electric vehicles, which is greater than in the internal combustion engine segment,” Antlitz told CNBC’s Annette Weisbach on Tuesday.
Volkswagen stock rose 4% in early morning trading. The stock price has fallen more than 12% since the beginning of the year.
There are no major supply restrictions due to the Iran war.
The results come as European automakers struggle to cope with a series of industry challenges, including intense competition from Chinese car brands and U.S. President Donald Trump’s import tariffs.
The automotive sector is widely considered to be highly vulnerable to U.S. tariffs, especially given the high degree of globalization of its supply chain and dependence on manufacturing operations across North America.
Asked about the potential impact on the company in light of the broader Middle East crisis and the heightened volatility in oil prices, Volkswagen’s Antlitz said: “This crisis is clearly worrying for all of our partners and customers in the region and their families.”
“In terms of the impact on our business, it’s been limited so far. We have long-term oil, gas and energy contracts, so we’re basically hedged on that front, and we’re not seeing any major supply constraints at this point.”
