Volkswagen reported a €5.8 billion loss for the third quarter on Thursday, widening from a €1.1 billion loss a year earlier as Europe's largest carmaker wrestles with intense competition from China and the costs of its electric-vehicle transition.
Sales fell 6.3 per cent in the quarter to €75.3 billion, the company said. Like its peers, Volkswagen has struggled with the costs of switching to electric vehicles, falling demand and fierce competition in China, the world's largest car market.
The 10-brand group, which includes Audi, Seat and Skoda, warned last month of a €10 billion hit to its annual profit, driven mainly by the value of its stake in Porsche, which is also struggling in China.
Volkswagen plans to cut 120,000 jobs across the group by 2030 to reduce costs. On Thursday it said the restructuring would cost €31 billion.
"What matters now is swift and consistent implementation," chief financial officer Arno Antlitz said in a statement. "We cannot lose any time and need to act quickly and decisively."
Analysis
Why This Matters
- Volkswagen is Europe's largest carmaker, so its losses signal the scale of pressure on the region's auto industry from Chinese competition and the electric-vehicle transition.
- The planned 120,000 job cuts by 2030 will affect workers across the group's ten brands and its German heartland.
- The €10 billion profit warning and €31 billion restructuring bill will shape Volkswagen's finances for years, with consequences for suppliers and investors.
Background
Volkswagen is a German automotive group whose brands include Volkswagen, Audi, Porsche, Seat and Skoda. Like other European manufacturers, it is investing heavily in electric vehicles while facing aggressive competition from Chinese rivals in China, the world's largest car market. The company announced last month that it expected a significant hit to its annual profit, tied largely to the value of its Porsche stake.
What to Watch
- Whether Volkswagen's full-year profit warning of a €10 billion hit materialises in its next results.
- How the planned 120,000 job cuts by 2030 are rolled out and whether costs stay within the €31 billion estimate.
- Volkswagen's sales and market share in China, where competition is its biggest challenge.
Checked
11 claims in this story checked against 1 source: 11 supported.
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- SupportedVolkswagen posted a €5.8 billion loss for the third quarter.Euronews: “Volkswagen said on Thursday it had made a €5.8 billion loss in the third quarter”
- SupportedChinese competition was a factor in the circumstances surrounding the loss.Euronews: “as it struggles with intense Chinese competition.”
- SupportedVolkswagen, described as Europe's largest carmaker, said restructuring would cost €31 billion.Euronews: “Europe's largest carmaker Volkswagen said on Thursday it had made a €5.8 billion loss in the third quarter”
- SupportedVolkswagen plans to cut 120,000 jobs across the group by 2030.Euronews: “Volkswagen plans to cut 120,000 jobs across the group by 2030 to reduce costs.”
- SupportedVolkswagen reported the third-quarter loss on Thursday, compared with a €1.1 billion loss in the same period a year earlier.Euronews: “Volkswagen reported a loss of €5.8bn ($6.5bn) in the third quarter on Thursday, compared with a loss of €1.1bn in the same period last year”
- SupportedSales fell 6.3 per cent in the quarter to €75.3 billion.Euronews: “Sales fell 6.3% in the quarter to €75.3bn, Volkswagen said.”
- SupportedVolkswagen has struggled with EV-transition costs, falling demand and fierce competition in China, the world's largest car market.Euronews: “Like its peers, Volkswagen has struggled with the costs of transitioning to electric vehicles, falling demand and fierce competition in China, the world's largest car market.”
- SupportedVolkswagen is a 10-brand group that includes Audi, Seat and Skoda.Euronews: “The 10-brand group, which includes Audi, Seat and Skoda”
- SupportedVolkswagen warned last month of a €10 billion hit to annual profit, driven mainly by the value of its Porsche stake.Euronews: “warned last month of a €10bn hit to its annual profit, driven mainly by the value of its stake in Porsche”
- SupportedVolkswagen CFO Arno Antlitz said in a statement, “What matters now is swift and consistent implementation.”Euronews: “"What matters now is swift and consistent implementation," the company's chief financial officer, Arno Antlitz, said in a statement.”
- SupportedVolkswagen CFO Arno Antlitz said in a statement, “We cannot lose any time and need to act quickly and decisively.”Euronews: “"We cannot lose any time and need to act quickly and decisively."”
