Volkswagen Continues Cost-Cutting Amid Profit Decline

Volkswagen AG reported a decline in second-quarter margins, attributed to restructuring charges and lower deliveries in China, with its operating return dropping to 6.3%. The company is intensifying cost-cutting measures as part of a €10 billion savings initiative, aiming for up to €4 billion in cuts in 2024. Chief Financial Officer Arno Antlitz emphasized the urgency of these efforts, stating that current margins are too low compared to competitors, and significant cost reductions will be necessary in the second half of 2024 and beyond. Despite a slight increase in turnover, vehicle sales fell by 3.8% year-on-year, particularly impacted by a 19% drop in the Chinese market. Volkswagen's strategy includes revamping its product lineup with a focus on electric vehicles tailored for key markets. The automaker remains under pressure from rising operational costs and increasing competition from new entrants in the EV sector.