Der Milliardenverlust von VW erhöht den Spardruck im Konzern

Volkswagen, Europas largest automobile manufacturer, is grappling with a significant loss of billions, which is putting pressure on its corporate savings. The decline can be attributed to the weaker performance of its Porsche division and a drop in China's market.

The management's decision to announce the construction of a factory in the US during a presidential campaign rally sparked controversy among politicians and media back home. However, this event was just a small part of a larger issue. At 7:30 AM on Thursday, the VW central office sent out a communication urging a focus on the essential matters. The first nine months' results underscored the "immediate action pressure", stating that the company must act quickly and decisively.

The figures appear bleak at first glance. Between July and September, Volkswagen recorded an operating loss of 5.9 billion Euros. However, this was largely due to one-time effects, most of which were booked in the third quarter. The firm value of Porsche was written down by 6.4 billion Euros, and there were another billion in Chinese valuation corrections. China, once a growth market, continues to decline, with only around 400,000 cars sold in the third quarter, a nearly 40% decrease from the previous year.

The weakness in China is the main reason for the modest performance beyond one-time effects. Vehicle sales and revenue fell slightly in all three brand groups in the first nine months. However, the mass market did better, especially the Skoda segment and the luxury segment. The shift towards electric cars is a mixed blessing for Volkswagen, as it earns less from these battery-powered vehicles compared to traditional combustion engines.

The operating return was 3.8%, significantly below the management's target of at least 8%. Finance chief Arno Antlitz emphasized that this is insufficient to invest confidently in the company's future.

The company plans to cut up to 50,000 jobs in the coming years, streamline structures, and possibly close four German plants to secure sufficient profitability. The weak numbers might provide some relief in current negotiations with employee representatives. The management had previously warned that the company was on the brink of a financial crisis, necessitating significant cuts.

The December Board of Directors agreed on a plan, but discussions continue over its details. The plan assumes that Volkswagen will sell nine million vehicles annually across all brands in the future, while their current capacity is set to produce up to twelve million cars globally. However, by January to September, only 5.9 million new cars rolled off the assembly lines worldwide.

On a yearly basis, the company may miss even its adjusted target, and they may need to act more swiftly and decisively. Thousands of job losses in the European automotive industry add to the uncertainty. However, Europe also produces important defense materials and key components for data centers. A retreat to industry is premature.

China shines with technology, while Europe excels in culture and emotion. The Paris auto show could signal a turnaround. No company stands as symbolically for the success of German industry, nor for its deep crisis: Why can the Volkswagen Group still have a future despite favorable competitors from China and high location costs?