VW warns of potential €10bn hit from Porsche writedown

By the Editorial Team · Saturday, September 19, 2026

Volkswagen has revised its 2024 profit forecast downward due to a €6 billion writedown on its Porsche stake, challenges in the Chinese market, and costly restructuring efforts involving job cuts and plant closures. This reduced profit outlook highlights the company’s struggle against rising competition and shifting consumer demand, particularly as the Chinese market contracts and EV margins tighten.

Volkswagen has lowered its profit forecast for 2024, citing a €6 billion writedown related to the valuation of its stake in Porsche, ongoing challenges in the Chinese market, and increased costs associated with a major restructuring effort. Following the announcement, shares in the German automaker dropped by as much as 7 percent.

The company now anticipates an operating profit margin of approximately 1 percent for the year, down from an earlier estimate of 4 to 5.5 percent. Volkswagen indicated that the total negative impact on its earnings could reach up to €10 billion.

Volkswagen faces mounting pressure from intensified competition with Chinese manufacturers, escalating U.S. tariffs, and narrower margins on its expanding electric vehicle (EV) portfolio. The group recently agreed with labor unions on a large-scale restructuring plan that could result in the elimination of around 100,000 jobs and the closure of four production plants in Germany.

Financial analysts have highlighted the substantial costs associated with this restructuring. UBS has projected expenses could reach €7 billion, while Bank of America estimates gross charges as high as €10 billion. The anticipated restructuring costs factor in expenditures linked to early retirements negotiated for 2024, as well as the planned sale of Volkswagen’s Osnabrück plant to an Israeli investment firm.

Volkswagen’s statement attributed the revised earnings outlook to a “further deterioration in the market environment, especially in China,” alongside a rapid shift in consumer demand toward battery-electric vehicles. The company’s passenger vehicle division and luxury brands, including Porsche and Audi, have been notably affected by a sustained decline in Chinese sales—a market that recently shrank by 20 percent without signs of recovery.

Chief Financial Officer Arno Antlitz emphasized the impact of the slump, noting, “The world’s largest single market has slumped by 20 percent, with no consolidation in sight. We cannot escape this trend.” The rise of Chinese automakers such as BYD and Xiaomi, combined with changes to Beijing’s tax policies on luxury vehicles, have further compounded difficulties for Germany’s premium car manufacturers.

Earlier this year, Volkswagen shares had risen by approximately 9 percent following the supervisory board’s approval of the restructuring plan, reflecting investor optimism that the company would make decisive moves to restore competitiveness amid a rapidly evolving automotive landscape.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.