Affected by U.S. tariffs, EU carbon emission regulations, and restructuring, Volkswagen's quarterly profits have significantly declined
Volkswagen's operating profit in the first quarter fell from €4.6 billion in the same period last year to €2.8 billion, significantly below the market expectation of €4 billion. The main reasons include uncertainty over U.S. tariffs, provisions for European carbon emission regulations, and costs related to the restructuring of the software division. Although the company confirmed its forecast for a 5% increase in annual sales, it did not take tariff impacts into account. Revenue in the first quarter grew by approximately 3%, reaching €78 billion
Reuters Berlin, April 9 - Volkswagen (VOWG.DE) stated that the uncertainty brought by U.S. President Trump's tariffs is one of the factors that caused its operating profit in the first quarter to plummet from €4.6 billion in the same period last year to €2.8 billion (USD 3.07 billion).
The profit of Europe's largest car manufacturer was far below the market expectation of around €4 billion.
Due to the uncertainty of Trump's tariffs, Volkswagen has suspended the transportation of cars from Mexico by rail and is temporarily holding cars arriving from Europe at ports.
The company confirmed its forecast for a 5% sales growth for the year and an operating return on sales between 5.5% and 5.6%, but stated in its earnings announcement that these forecasts do not include the potential impact of tariffs, as it is still too early to assess their effects.
It remains unclear what further impact will arise from Trump's announcement on Wednesday evening to suspend some tariffs for 90 days.
Volkswagen stated that provisions for the diesel issue and adjustments to the valuation of in-transit vehicles related to U.S. tariffs led to a reduction in operating profit of €300 million.
The reserve for European carbon emission regulations is €600 million, but this cost may be canceled once the EU's new regulations are finalized. The restructuring of Volkswagen's software division also cost €200 million.
Group revenue in the first quarter grew by about 3% to €78 billion
