Volkswagen Group's operating profit plunged 33% in the first half of 2025
Jul 29, 2025
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Sales in the first half of 2025 were 158.4 billion euros (W257 trillion), similar to those of the previous year (158.8 billion euros). Relatively, operating profit in the first half of 2025 was 6.7 billion euros (10.8 trillion won), down 33% from the same period last year (10 billion euros). The operating profit ratio to sales was only 4.2 percent.
Vehicle sales in the first half of 2025 were 4.36 million units, slightly exceeding the same period last year (4.34 million units). Growth in the South American (+19%), Western Europe (+2%), and Central and Eastern Europe (+5%) markets sufficiently offset expected declines in China (-3%) and North America (-16%) mainly due to tariffs.
Oliver Blume, CEO of Volkswagen Group, said, "The Volkswagen Group has remained firmly in place even in a very difficult environment, thanks to the success of its new products. Remarkable improvements have been made in design, technology, and quality, and significant progress has been made in software. In a highly competitive global market, the group's sales performance remains stable," he noted.
"In Europe, we have further strengthened our leading position with a 28% market share in electric mobility, and order volumes remain solid. We expect positive trends to continue in the second half of the year, driven by continued product attacks and stable demand," he said.
The decline in operating profit is mainly due to the cost of raising U.S. import tariffs (1.3 billion euros), restructuring provisions for Audi and Volkswagen cars, and Cariard (700 million euros), and carbon dioxide regulations. The increase in the proportion of electric vehicles and negative mixing effects such as price and exchange rate effects also had an effect. Excluding the impact of the U.S. tariff hike and restructuring, the operating margin is 5.6%.
Arno Antlitz
Volkswagen Group CFO and COO
The performance in the first half of the year is ambivalent, said Arno Antlitz, Chief Financial Officer and COO of Volkswagen Group. It has achieved strong product success and made progress in reorganizing the company. On the other hand, operating profit fell by a third year-on-year, driven by higher sales of low-margin electric vehicle models. In addition, the U.S. increase in import tariffs and restructuring measures had a negative impact.
Excluding these factors, the operating margin for the second quarter is close to 7% and is at the top of the expected range. This shows that the group is moving in the right direction. But in the end, what matters is securing real cash. That's why the group should continue to push its ongoing program to improve revenue, and speed up if necessary," it added.
In addition to changes in operating performance, the main cause of the decrease in net cash flow was M&A expenditure. This included 900 million euros for the additional acquisition of Rivian shares. Restructuring measures and costs related to U.S. import tariffs also affected. On the other hand, the decrease in cash levels tied to working capital compared to the same period last year was positive.
Order orders in Western Europe increased significantly compared to the same period last year. New models across all driving systems, including the Volkswagen ID.7 Tourer, Cupra Terrama, Skoda Eloke, Audi Q6 e-Tron, and Porsche 911, led the way. In particular, orders for pure electric vehicles rose 62%, brightening the outlook for the second half of the year.
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Editor Kim Tae-jin, tj.kim@carguy.kr
This article was translated by Naver AI translator.
