Volkswagen’s earnings fell last year, and its profitability can only be improved this year, as a car manufacturer repos the global business to resolve trade policies in the United States and the heavy competition of its Chinese rivals.
Volkswagen is the largest European car manufacturer, and the reach extends around the world. Although the size and scale of the company has served it well for decades, they have become a headache in recent years, especially since President Trump has increased the global trade practice threatening Tariff against the largest American trade partners.
Volkswagen said on Tuesday that his revenue was straight, while operating profits fell 15 percent in 2024, stating a “significant increase in fixed costs” associated with restructuring. For this year, the company expects that his operating profit margin will be ranging from 5.5 to 6.5 percent, about the same as the 5.9 percent of the margin he recorded last year.
“Our chances of reflecting global economic challenges and deep changes that take place in the industry,” said Arno Antlitz, Volkswagena’s Chief Financial Director. Among the challenges, he said, “an environment of political uncertainty, expanding trade limitations and geopolitical tension.”
The company’s restructuring costs included almost $ 1 billion for a shipping salary that was associated with the Volkswagen Administrative Department. The company also reached Agreement last year With the Union Ig Metall, which included plans to reduce 35,000 jobs through retirement and exhaustion, but without any immediate shutter clutches 10 company factories in Germany.
The Audi Factory in Brussels closed its doors at the end of February, a decision costing a $ 1.75 billion equivalent that was written off last year. The plant, like those in Germany, struggled with high labor costs and structural costs.
Volkswagen switches its production in Europe to Spain and Portugal, where energy and work costs are much lower. The battery factory is planned in Valencia, and the new electric model of car manufacturer will be produced at the Palmela plant.
In the United States, Volkswagen has received hopes of revival of the Scout brand, for which the company bets will compete in the lucrative truck market. It will include a completely electric model and the other equipped with a battery and a small combustion engine, known as a range.
Despite the efforts of Trump administration to remove subsidies and tax reliefs for electric cars, Volkswagen said that it remains dedicated to the battery technology in all its markets and that he expects the demand for cars on the battery to increase at 2025.
Volkswagen faces the threat of American tariff, which Mr. Trump said he plans to impose imports from Europe as well as Canada and Mexico. In addition to its installation plant at Chattanoogi, Tenn., Volkswagen has a plant in Puebla in Mexico, and builds a battery factory in Canada.
Oliver Blume, the Volkswagen Executive Director, said he was waiting for the specific tariff strategy from Washington and Government officials in Brussels and Berlin, and Berlin set up their position before the company started talking to Trump’s administration.
“We’ll talk when the general frame is clear,” Mr. Blume said.
Showing on Return of American car manufacturers Because of this, Mr. Trump paused tariffs on cars and parts of cars from Canada and Mexico, Mr. Antlitz said that Volkswagen also hoped that a resolution that reflected the complexity of the cross -border car industry in North America could be reached.
“You can’t easily localize the vehicle overnight,” he said. “We’ll have to see what happens.”
Later that day, Mr. Trump escalated his fight with Canadasaying that they would double the steel and aluminum imports and put tariffs on the import of Canadian cars so high to “permanently extinguish a car to produce car in Canada.”
In China, another key market for Volkswagen, a German car manufacturer is struggling to compete with local competitors who have faster adopted their offer to customers who reward software engaging in their cars. Volkswagen expects to see losses up to one billion euros ($ 1.1 billion) in China this year in China) in China, Mr. Antlitz said.
Last year, Volkswagen set a joint investment with the Chinese car manufacturer Xpeng, as part of his “China for China” strategy, which he hopes to help him lose the market in the market Competitors like byd -ai Xiaomi.
