Volkswagen's Sales in China Decrease by 12%
Audi to Halt Operations at Brussels Plant in February Next Year
Europe's largest automaker Volkswagen announced on the 30th (local time) that its third-quarter net profit fell to one-third of last year's level. The net profit for the third quarter this year was 1.576 billion euros (2.35 trillion won), a decrease of 63.7% compared to the same period last year.
The cumulative net profit for this year was recorded at 8.917 billion euros, down 30.7% from the same period last year. The third-quarter operating profit before interest and taxes was 2.855 billion euros, a 41.7% decrease from last year.
Sales volume up to the third quarter was 6.463 million units, down 4.4% year-on-year. By region, sales increased by 4% in North America and 16% in South America, but decreased by 12% and 1% in China and Western Europe, respectively. Volkswagen stated that new models received favorable reviews, leading to a 27% increase in orders in Western Europe in the third quarter.
Arno Antlitz, Chief Financial Officer (CFO), commented on the core brand Volkswagen's operating profit margin of only 2% over nine months, saying, "Significant cost reductions and efficiency improvements are urgently needed."
Europe's largest automaker Volkswagen announced on the 30th (local time) that its third-quarter net profit has decreased to one-third of last year's level.
Recently, Volkswagen declared an emergency management plan, proposing to the labor union the closure of at least three out of ten factories in Germany and a 10% wage cut for all employees. The company terminated the employment security agreement established since 1994 and left open the possibility of layoffs.
Restructuring is underway in countries outside Germany. Volkswagen subsidiary Audi notified the union yesterday that it will halt operations at its Brussels plant in Belgium starting February next year. This plant, employing 3,000 workers, produces only the electric sports utility vehicle (SUV) Q8 e-tron. It is also reported that negotiations are ongoing regarding the sale of the plant.
The industry views workforce reductions as inevitable during the transition to electric vehicles, which have simpler production processes compared to internal combustion engine vehicles. Volkswagen argues that decreased demand has lowered plant utilization rates, making operations unprofitable. The German Association of the Automotive Industry (VDA) reported yesterday that the domestic industry lost 46,000 jobs over five years from 2019 to last year, and projects that up to 190,000 jobs could disappear by 2035.
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