Volkswagen AG Cuts 2026 Profit Outlook, Cites China & Porsche

Volkswagen AG significantly lowered its 2026 operating return on sales forecast to up to 1 percent, down from a previous range of 4.0 to 5.5 percent. The revision follows a €6 billion goodwill impairment on its Porsche AG investment and a deteriorating market environment, particularly in China. Group sales revenue is now expected to be around €315 billion, roughly in the middle of the prior guidance range of -3 to 0 percent growth, compared to €321.9 billion in 2025.

Special effects totaling approximately €10 billion will weigh on operating profit for the year, with €0.9 billion already reported in the first half of 2026. Adjusted for these effects, the operating return on sales would be around 4 percent. Volkswagen expects net cash flow in the Automotive Division to be between €3 billion and €6 billion, with net liquidity remaining in the range of €32 billion to €34 billion. The company attributes the revised forecast to a weakening market, especially in China, and an accelerating shift toward battery-electric vehicles, impacting performance at Audi and Volkswagen Passenger Cars.

The dividend proposal for the 2026 financial year will be decided in early 2027. These results reflect significant headwinds, with a substantial reduction in profitability expectations and the need for substantial impairment charges, set against a backdrop of shifting demand and regional economic challenges.