Volkswagen cuts profit outlook as Porsche drives $11.5 billion hit

Anabelle Colaco
21 Sep 2026, 10:58 GMT+10

Volkswagen has sharply lowered its 2026 profit outlook after flagging 10 billion euros (US$11.5 billion) in one-off items linked to its stake in luxury sports car maker Porsche, provisions for job cuts and weakness in the Chinese market
The world's second-largest automaker now expects a profit margin of no more than one percent in 2026, down from its previous forecast of 4.0 percent to 5.5 percent
Porsche has been particularly affected by U.S. tariffs and collapsing demand for foreign luxury brands in China

BERLIN, Germany: Volkswagen has sharply lowered its 2026 profit outlook after flagging 10 billion euros (US$11.5 billion) in one-off items linked to its stake in luxury sports car maker Porsche, provisions for job cuts and weakness in the Chinese market.

The world's second-largest automaker now expects a profit margin of no more than one percent in 2026, down from its previous forecast of 4.0 percent to 5.5 percent.

New mid-term assumptions for Porsche, in which Volkswagen owns a 75.4 percent stake, resulted in an impairment of about 6 billion euros.

Porsche has been particularly affected by U.S. tariffs and collapsing demand for foreign luxury brands in China. The division posted a profit margin of just 1.1 percent last year.

Volkswagen shares closed 5.6 percent lower following the announcement, while Porsche shares fell 3.3 percent. Volkswagen's largest shareholder, Porsche SE, also lowered its outlook, sending its shares down 4.9 percent.

The profit warning comes after Volkswagen reached an agreement with unions earlier this month on far-reaching cuts as it contends with strong competition from Asian rivals and stagnant demand in Europe.

Volkswagen, whose brands also include Audi, Skoda and Seat, warned of a "further deterioration in the market environment, especially in China, as well as an accelerated shift in demand in favor of battery-electric vehicles".

The company said these developments would result in lower expectations for its Audi and Volkswagen passenger car brands.