Volkswagen, the leading automobile manufacturer in Europe, reported a decline in profits for the previous year, with expectations for only a minor increase this year as the company restructures its operations in response to altering trade relations in the United States and heightened competition from Chinese automakers. The company's revenue remained stagnant while the operating profit plummeted by 15% in 2024, attributed to "a significant increase in fixed costs" due to restructuring efforts.
Volkswagen's CFO, Arno Antlitz, indicated that the current economic landscape poses numerous challenges, including political uncertainty and expanding trade barriers. With restructuring costs reaching nearly $1 billion, including a severance program impacting the administrative sector, the automaker has agreed to a plan to reduce its workforce by 35,000 through attrition and retirements, aiming to avoid immediate factory closures in Germany.
CEO Oliver Blume mentioned the necessity to wait for a clear tariff strategy from the U.S. administration before initiating any formal discussions with the White House. Volkswagen remains cautiously optimistic about its operating profit margin for the year, projecting it between 5.5% and 6.5%, aligning closely with last year's 5.9%.
