Volkswagen posts €5.8 billion loss as Chinese competition bites

Frankfurt, Germany (AP) — Volkswagen disclosed a staggering 5.8 billion euro ($6.5 billion) after-tax loss for the July-September quarter, primarily driven by significant one-time charges and a sharp decline in Chinese sales, coupled with the impact of U.S. tariffs and reduced profits from electric vehicles.

The company's financial report, released Thursday, highlights the obstacles it faces in its cost-cutting efforts, which could result in up to 100,000 job losses and the closure of four German manufacturing plants. CFO Arno Antlitz emphasized the urgency of the situation, stating that the company "cannot afford to lose any time and must act quickly and decisively."

Volkswagen's revenue for the quarter fell by 6.3% to 80.3 billion euros compared to the previous year. The earnings decline was further exacerbated by a 6.4 billion euro reduction to value its stake in luxury automaker Porsche. China, once a crucial profit center for Volkswagen, is now experiencing a drop in demand for its vehicles, exacerbated by intense competition from local carmakers in the region.

Additionally, the United States' imposition of tariffs, or import taxes, under President Donald Trump has negatively affected profits. Moreover, the increasing segment of electric vehicles within the company's lineup, which generate lower revenues per vehicle than traditional internal combustion models, has also contributed to the financial strain.