Key facts
- Volkswagen cut its 2026 profit margin outlook to a maximum of 1%, down from 4%-5.5%.
- The company cited a sluggish Chinese market and higher retirement provisions.
- A €6 billion goodwill impairment at Porsche contributed to the warning.
- Porsche SE, Volkswagen's largest shareholder, also slashed its outlook.
- Volkswagen expects lower expectations for its Audi and Volkswagen passenger car brands.
Volkswagen shares continued their decline on Monday following a profit warning issued on Friday that included a significant goodwill impairment at its luxury sportscar division, Porsche. The automaker slashed its 2026 profit margin outlook to a maximum of 1%, a steep drop from the previously guided range of 4% to 5.5%.
Factors contributing to the revised forecast include a sluggish Chinese market, increased provisions for retirements, and the dire situation at Porsche. The luxury brand division itself posted a profit margin of just 1.1% last year and has been impacted by US tariffs and declining demand for foreign luxury vehicles in China. Volkswagen also warned of a further deterioration in the market environment and an accelerated shift in demand towards battery-electric vehicles, which is expected to lower expectations for its Audi and Volkswagen passenger car brands.
Shares in Volkswagen were down 2% at 0713 GMT on Monday, while Porsche's stock fell 2.8%. Porsche SE, Volkswagen's largest shareholder, also saw its shares drop 3.5% after it too cut its outlook.