FILE PHOTO: General view of the Volkswagen power plant in Wolfsburg
by Christoph Steitz and Christina Amann
Volkswagen lowered its annual outlook on Friday, for the second time in less than three months, due in particular to a weaker-than-expected performance from its passenger car division.
The automaker is now targeting a profit margin of around 5.6% in 2024, up from 6.5 to 7% previously and while analysts were targeting 6.5%, according to LSEG data.
Annual sales are expected to fall by 0.7% to 320 billion euros while the company initially targeted an increase of up to 5%.
Volkswagen is not the only company in the sector to have cut its outlook this year, with Mercedes-Benz and BMW doing the same earlier this month due to weakening demand in China, the sector’s largest market.
Volkswagen has also started crucial negotiations with IG Metall, Germany’s most powerful union, over wages and job protection.
Deliveries forecasts are now expected at around 9 million vehicles this year, while the group expected to increase them by 3% after having delivered 9.24 million in 2023.
Volkswagen, which is due to present its third quarter results on October 30, also anticipates net cash flow for its automotive division of around 2 billion euros, compared to 2.5 to 4.5 billion previously.
(Reporting by Christoph Steitz and Christina Amann, with Peter Henderson; French version by Kate Entringer)
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