Conclusion reached: Unessential actions were deemed unnecessary.
Volkswagen Group, the parent company of renowned automobile brands like Audi and Porsche, is grappling with financial difficulties in the second quarter of 2025. The group recorded a 33% drop in profits after taxes, earning €2.29 billion.
The primary culprit behind this financial downturn is the impact of US tariffs, which has taken a significant toll on both Audi and Porsche. Audi's profit dropped by about 64%, and Porsche's plunged by approximately 91%, leading to reduced full-year margin forecasts for both. Audi is now expected to achieve margins between 4–5%, down from 5.5–6.5%, while Porsche's forecast stands at 4–5%, a considerable decrease from its previous estimate.
These tariffs have resulted in an €1.3 billion operating profit hit across the VW Group, directly affecting Audi and Porsche's profitability. The financial strain is compounded by broader challenges such as currency effects, modest vehicle sales growth, and logistical costs.
Despite these challenges, Volkswagen Group is maintaining a cautious approach to financial management, with a focus on net liquidity between €31 and €33 billion, slightly below previous estimates. However, specific restructuring steps taken by Audi and Porsche in response to these financial difficulties have not been detailed in the available reports.
Volkswagen's CEO, Oliver Blume, expects lower revenue for the year, aiming for revenue at the previous year's level. Despite slightly higher deliveries, revenue was down 3% at €80.6 billion. The group's operating profit fell by more than 29% to €3.83 billion.
The core Volkswagen brand, however, is financially benefiting from a major savings program that will eliminate over 35,000 jobs by 2030. In contrast, Audi and Porsche are burdened by high restructuring costs and are struggling in key markets like China. Audi plans to cut 7,500 jobs, and Porsche at least 1,900 jobs.
Porsche's operating profit in the automotive business, excluding financial services, was just €154 million, down from €1.7 billion a year ago. Audi's operating profit in Q2 fell by two-thirds to €550 million.
The growing electric vehicle business is currently burdening the result, according to Chief Financial Officer Arno Antlitz. The operating profit margin for the year is expected to be between 4.0 and 5.0 percent.
The US tariffs have been particularly costly for the group, with €1.2 billion in import tariffs alone. The current operating margin is 4.7%, in line with analysts' expectations. However, the 27.5% tariff imposed on cars in the US since April has led to a 16% drop in sales, and Audi is temporarily slowing sales due to the introduction of new models.
In conclusion, the Volkswagen Group is facing significant financial challenges due to the impact of US tariffs and market pressures. While specific restructuring measures from Audi and Porsche have not been detailed yet, the group is maintaining a cautious approach to financial management. The core Volkswagen brand, however, is financially benefiting from its savings program, providing a glimmer of hope amidst these challenges.
The US tariffs have negatively affected not only Volkswagen Group's financial health but also its subsidiaries, Audi and Porsche, with Audi's profit dropping by about 64% and Porsche's plunging by approximately 91%. The financial industry is closely monitoring the group's response, especially restructuring steps taken by Audi and Porsche to mitigate these financial difficulties. Beyond the tariffs, the group is grappling with broader challenges such as currency effects, modest vehicle sales growth, and logistical costs in the transportation industry.
