Core Insights - Volkswagen has lowered its full-year guidance and reported a significant decline in second-quarter profit due to the impact of U.S. tariffs and increased competition from Chinese car brands [1][2][4]. Financial Performance - The company posted an operating profit of 3.83 billion euros ($4.49 billion) for the second quarter, a decrease of 29% from 5.4 billion euros a year ago [1][2]. - Second-quarter sales revenue was reported at 80.8 billion euros, falling short of analyst expectations of 82.2 billion euros [2]. Market Challenges - The automotive sector is facing challenges from robust competition, particularly from Chinese brands, and the impact of U.S. President Trump's import tariffs of 25% [2][4]. - Volkswagen's CFO noted that the decline in operating results was partly due to higher sales of lower-margin all-electric models and restructuring measures [3]. Future Outlook - Volkswagen expects its full-year operating return on sales to be between 4% to 5%, down from a previous range of 5.5% to 6.5% [4]. - The company is particularly vulnerable to U.S. tariffs due to the globalization of supply chains and reliance on North American manufacturing [4].