Volkswagen forecasts easing margin pressure in 2026 after profit slump

Core Viewpoint - Volkswagen anticipates a recovery in profit margins by 2026, projecting an operating margin between 4% and 5.5%, following a significant decline to 2.8% in 2025 due to tariffs, competition, and the transition to electric vehicles [1] Financial Performance - The company's operating profit fell to 8.9 billion euros in 2025, below the analysts' forecast of 9.4 billion euros, and down from 18.1 billion euros in 2024 [1] - Revenue remained stagnant at 322 billion euros in 2025, with expectations for 2026 revenue growth projected between 0% and 3% [1] Challenges and Strategic Responses - Volkswagen faces challenges from U.S. tariffs costing billions and increased competition in China, impacting market share [1] - The company is implementing product launches and restructuring measures to enhance resilience, although the adjusted operating margin of 4.6% is deemed insufficient for long-term sustainability [1] Porsche's Performance - Porsche's operating profit plummeted by 98% to 90 million euros in 2025, with its operating margin dropping to 0.3% from 14.5% in 2024, largely due to a stalled electric vehicle strategy [1]