Volkswagen cuts 2026 profit outlook to 1% margin on China slump, Porsche writedown

September 18, 2026 at 11:10 PM2 min

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Volkswagen slashed its 2026 operating margin forecast to no more than 1% from at least 4%, citing deteriorating China business and a €6 billion Porsche writedown. The German automaker expects around €10 billion in exceptional charges this year, including restructuring costs and Chinese asset writedowns. Shares fell more than 7% following the announcement.

Key Facts

Volkswagen now expects an operating margin of no more than 1% in 2026, down from a previous forecast of at least 4%.
The company anticipates around €10 billion ($11.5 billion) in exceptional charges this year, including a €6 billion writedown related to Porsche.
Volkswagen shares fell more than 7% after the profit warning, dragging other automakers lower.
CFO Arno Antlitz said the Chinese market has contracted by around 20% with no stabilization in sight.
A recent labor agreement could increase planned job cuts to 100,000 globally.

Profit Warning

Volkswagen cut its 2026 operating margin forecast to no more than 1%, down from at least 4%. The company expects around €10 billion ($11.5 billion) in charges this year, including restructuring costs and writedowns on Chinese assets. A €6 billion writedown related to Porsche reflects revised long-term expectations for the sports-car maker. Excluding exceptional charges, Volkswagen said its operating margin would be around 4%.

China and EV Pressures

CFO Arno Antlitz said the Chinese market has contracted by around 20%, with no stabilization currently in sight. Chinese automakers are taking domestic market share and expanding into Europe with competitively priced electric vehicles. Volkswagen said growing EV sales are weighing on profitability at its Volkswagen passenger-car and Audi businesses because battery-powered vehicles generate lower margins than combustion-engine models.

Cost-Cutting Response

The deteriorating outlook is accelerating Volkswagen's efforts to reduce costs. The automaker recently reached an agreement with labor representatives that could increase planned job cuts to 100,000 globally. Management is also seeking to address excess manufacturing capacity in Germany. Two pillars that historically supported Volkswagen's European operations—strong Chinese earnings and premium-brand profits—are weakening simultaneously.