German auto workers protest amid VW profit warning

On Monday, German auto workers staged nationwide protests, less than three days after Volkswagen announced a shocking profit warning. This highlights the sector's unprecedented challenges due to high costs and fierce competition from Asian rivals. The protests occurred at Volkswagen and parts supplier Bosch as Germany's most important industry faces painful job cuts, possible production relocations, and even plant closures.

Horst Ott, from trade union IG Metall, blamed the industry's lag in embracing e-mobility, digitalization, and battery technology, causing it to fall behind. European automakers are facing increased competition from Asian rivals, both abroad and domestically, creating a major problem for Volkswagen, which is already grappling with overcapacity on the continent, US tariffs, and plunging profits in China.

Volkswagen recently cut its profit margin outlook for 2026 to 1%, attributing the decline to the sluggish Chinese market, higher provisions for retirements, and lower expectations for its Porsche brand. This reflects the sector's continuous reliance on combustion engines that have powered Germany's top economy for decades. Volkswagen shares fell by 0.6 points, while Porsche's stock declined by 2.3%, extending its losses from the previous day.