Shares buckled as Volkswagen disclosed on September 18 that it would absorb roughly €10 billion in one-time charges this year, slashing its operating-margin target from 4%–5.5% to a maximum of 1% — the worst profitability outlook in the company's recent history. The stock is now down 27% since January , and the damage is rippling across Germany's auto sector.
• Porsche, Once the Crown Jewel, Now a €6 Billion Writedown
The largest charge is a roughly €6 billion impairment on goodwill allocated to Porsche, in which Volkswagen owns 75.4%.
An impairment doesn't represent an immediate cash payment — it reduces the accounting value of an asset after management concludes its future earnings can no longer justify the previous valuation. Translation: Volkswagen is officially admitting that the price it assigned to Porsche was too high. The sports car brand has been hit by U.S. tariffs and a collapse in demand for foreign luxury vehicles in China.
• China Is Shrinking Fast and There's No Quick Fix
China sales fell 20% in the first half of 2026 , accelerating a decline that saw deliveries plunge 36.6% in Q2 alone . The proportionate operating result from China joint ventures is projected at just €0.2 billion to €0.6 billion for the full year, down dramatically from €958 million in 2025. Chinese domestic rivals are flooding the market; local manufacturers have seized the lead on electric vehicles and are now expanding into Europe.
• The Restructuring Bill Is Doubling
The drastic cut follows a hard-won agreement with workers that will double job cuts to 100,000 globally.
An additional €2 billion in second-half charges covers early-retirement programs, the planned sale of the Osnabrück plant, and non-cash impairments on Chinese assets.
The third-quarter statement due October 29 is expected to show a quarterly operating loss of around €5 billion.
• Cash Flow Holds — For Now — But the Margin Trend Is Alarming
Volkswagen maintained its automotive division net cash-flow forecast of €3–6 billion and net liquidity of €32–34 billion.
Stripping out special items, the adjusted margin sits at roughly 4% — survivable, but still below prior guidance. The deeper worry: operating return on sales has fallen every year since 2022, from around 8% to roughly 6% in 2023, near 5% in 2024, and just over 2% in 2025.
This marks the second profit warning this year , and investors now face a capital markets day on October 7 where Porsche must convince them the reset has a bottom.