Volkswagen Reports Drop in Second Qurater Profits
(MENAFN) Volkswagen, Europe's largest automaker, reported a 29% year-on-year drop in operating profits for Q2 2023, driven by rising costs tied to US tariffs. The company revealed that its operating profit fell to €3.83 billion ($4.49 billion) from €5.4 billion ($6.34 billion) in the same period last year.
Revenues also took a hit, dropping 3% year-on-year to €80.8 billion ($95.6 billion), falling short of analysts' expectations for the quarter.
The German carmaker has revised its 2025 operating return on sales forecast, now projecting a range of 4% to 5%, down from its prior estimate of 5.5% to 6.5%.
These financial results reflect the pressure from intense competition with Chinese automakers, alongside escalating US tariffs—which currently stand at 25%. Adding to the uncertainty, US President Donald Trump earlier this month announced a 30% tariff on imports from the EU, set to take effect on August 1.
Arno Antlitz, Volkswagen's CFO, explained that while the company has seen a rise in electric vehicle (EV) sales, the lower profit margins on EVs, compared to traditional internal combustion engine vehicles, have contributed to the profit decline.
Antlitz further noted that one-off expenses, such as the impact of US tariffs and restructuring measures, cost the company approximately €2 billion ($2.37 billion) in total.
Volkswagen warned of "high uncertainty" regarding trade policies and expects the elevated US tariffs to persist through the second half of the year.
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