Volkswagen posts €5.8 billion loss as Chinese competition bites

German automaker Volkswagen disclosed a €5.8 billion loss for the third quarter of its fiscal year, marking a significant jump from a €1.1 billion loss in the same period last year. The decline in profit was attributed to the intensifying competition from Chinese car manufacturers. Overall sales for Volkswagen dropped by 6.3% to €75.3 billion, as reported on Thursday.

Volkswagen, alongside its competitors, has been grappling with the expenses associated with the shift to electric vehicles, dwindling demand, and fierce competition within China, the world's largest automotive market. The multinational corporation, comprising 10 brands including Audi, Seat, and Skoda, had earlier warned of a potential €10 billion dent in its annual earnings. This dip was largely due to the decreasing value of its Porsche stake, which is also facing challenges in China.

Volkswagen announced plans to lay off 120,000 employees across its group by 2030 in an effort to cut costs. The company revealed that the restructuring process would incur an additional €31 billion expense. Arno Antlitz, the chief financial officer, emphasized the need for swift and consistent implementation of these changes, stating, "We cannot afford to lose any time and must act promptly and decisively."