Volkswagen Reports $6.5 Billion Quarterly Loss Amid China Slump and Porsche Write-Down
Automaker cites weak demand in China, U.S. tariffs, and reduced profits from electric vehicles for significant third-quarter deficit.
FRANKFURT, Germany (AP) — Volkswagen posted an after-tax loss of 5.8 billion euros ($6.5 billion) for the third quarter, as a slump in demand in China, U.S. tariffs, and lower profits from electric vehicles were compounded by significant one-time charges.
The results announced Thursday underscore the challenges facing the German automaker as it pursues a restructuring aimed at cutting costs and potentially eliminating up to 100,000 jobs and closing four domestic plants.
"We cannot afford to lose any time and must act quickly and decisively," Volkswagen Chief Financial Officer Arno Antlitz stated. The company's financial performance thus far this year necessitates urgent action.
Sales revenue for the July-September period decreased by 6.3% to 80.3 billion euros compared to the same quarter in the previous year. A substantial portion of the earnings hit came from a 6.4 billion euro reduction to account for the diminished value of Volkswagen's stake in luxury carmaker Porsche.
China, historically a crucial profit driver for Volkswagen, is now presenting difficulties with declining car demand and intense price competition from local manufacturers. The impact of U.S. tariffs and the increasing market share of electric vehicles, which generate lower per-unit profits than internal combustion engine vehicles, have also weighed on the company's financial results.