The next bad news: the ailing Volkswagen Group again lowers its forecasts for the current financial year. The Wolfsburg company expects that even fewer cars will be sold.
Instead of an increase in deliveries of up to three percent compared to last year’s 9.2 million vehicles, the Wolfsburg-based company expects only around 9 million sales, as VW announced on Friday after the stock market closed. After a turnover of 322 billion euros last year, the group originally aimed for an increase of five percent, but now that will only be 320 billion euros in turnover.
CEO Oliver Blume also expects profitability to be weaker: he now estimates operating profit at 18 billion euros and therefore an operating profit margin of around 5.6 percent. The company recently assumed a return on turnover of 6.5 to 7 percent.
The negative streak doesn’t stop
VW had already lowered its profit forecast in July due to expected costs for the Audi plant in Brussels, which were at risk. After trading on Friday on the Tradegate trading platform, Volkswagen preference shares lost 3.2 percent compared to Xetra’s closing price.
The group justified the lowered forecast with weaker-than-expected results for the core VW brand, for VWN’s light commercial vehicles and for the parts division. The company is currently looking to massively expand austerity measures across its core brand and has ended the employment security scheme that has been in place for decades; layoffs and factory closures are under discussion. The economic climate and weaker development in financial services also had a negative impact, VW said.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
