Volkswagen’s earnings after tax fell 44% in 2025 to €6.9 billion, its lowest since 2016, hit by US tariffs, China competition and Porsche restructuring costs.

WOLFSBURG: Volkswagen’s earnings after tax plummeted by approximately 44% last year to €6.9 billion, marking the German automotive giant’s lowest annual profit since 2016.

The sharp decline was attributed to a combination of US tariffs, fierce competition in the Chinese market, and the costly restructuring of its sportscar subsidiary, Porsche.

Finance chief Arno Antlitz warned that the group’s current profit margin was insufficient for the long term, signalling that further cost-cutting measures could be necessary to restore competitiveness.

“We can only realise this if we continue to rigorously reduce costs,” Antlitz stated, adding that this would be the company’s focus in the coming months.

The company had already faced significant headwinds even before the imposition of US tariffs, including slumping sales in China, stagnant European demand, and heavy investment in electric vehicles amid uncertain consumer appetite.

As part of a broader plan to save €15 billion annually, Volkswagen struck a deal with unions in late 2024 to cut 35,000 jobs by 2030, with the majority of reductions affecting its core Volkswagen brand.

The 2016 profit figure, to which this year’s result was compared, was itself depressed by billions in one-off charges related to diesel emissions scandal recalls and legal settlements.

 The Sun Malaysia