[WOLFSBURG] Volkswagen, Europe’s top carmaker, expects at best a slight increase in its 2025 operating profit margin, it said, joining rivals in giving a subdued outlook for the year ahead as the sector battles weak demand, high costs and simmering trade tensions.
The group’s operating margin is expected in a range of 5.5 per cent to 6.5 per cent, compared with 5.9 per cent in 2024 and in line with the 6.1 per cent average estimate in an LSEG poll of banks and brokerages.
“We have strong brands, great products and a global scale. In view of these advantages, we cannot be satisfied with this financial outlook,” finance chief Arno Antlitz said on Tuesday (Mar 11) according to the advanced text of a speech.
“It reflects the current challenges in the global economy and an industry that is in the midst of a fundamental transformation,” he added, pointing the high costs of ramping up its battery-electric vehicle range and battery cell output.
The outlook for 2025 does not factor in the possible impact of trade tariffs threatened by US President Donald Trump on imports from Mexico or Europe, Antlitz said.
Shares in Volkswagen fell 3.6 per cent in early trade and are down by more than 40 per cent over the past four years, also hit by a slower-than-expected ramp-up of electric vehicle production, major pricing pressure in top market China and Asian rivals entering the European market.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The group proposed a dividend of 6.36 euros per preference share for 2024, down from 9.06 euros paid out for the previous year, reflecting ongoing savings efforts following major job and capacity cuts announced in December.
Its five-year investment plan for 2025 to 2029 totals 165 billion euros (S$239.4 billion), 15 billion euros less than the prior round, it said.
Operating profit fell 15 per cent in 2024 to 19.1 billion euros on revenue of 324 billion euros, in line with estimates by an LSEG poll.
The carmaker cut its outlook twice last year because of weaker-than-expected sales at its passenger car brand. REUTERS
