{"id":12146,"date":"2025-03-11T17:28:56","date_gmt":"2025-03-11T17:28:56","guid":{"rendered":"https:\/\/site.itshrt.com\/worldnews\/volkswagens-profit-under-pressure-from-tariffs-and-competition\/"},"modified":"2025-03-11T17:28:56","modified_gmt":"2025-03-11T17:28:56","slug":"volkswagens-profit-under-pressure-from-tariffs-and-competition","status":"publish","type":"post","link":"https:\/\/site.itshrt.com\/worldnews\/volkswagens-profit-under-pressure-from-tariffs-and-competition\/","title":{"rendered":"Volkswagen\u2019s Profit Under Pressure From Tariffs and Competition"},"content":{"rendered":"<p> <script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-6606220950177433\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- ItShrt World News -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-6606220950177433\"\r\n     data-ad-slot=\"1882483372\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\r\n<br \/>\n<\/p>\n<div data-testid=\"companionColumn-0\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Volkswagen\u2019s earnings dropped last year and its profitability may improve only marginally this year, as the automaker repositions its global business to deal with shifting trade policies in the United States and tough competition from its Chinese rivals.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Volkswagen is Europe\u2019s largest carmaker, and its reach extends across the globe. While the company\u2019s size and scale served it well for decades, in recent years it has become a headache, especially since President Trump upended global trade practices by threatening <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/02\/03\/business\/economy\/trump-tariffs-european-union.html\" title=\"\">tariffs against America\u2019s largest trading partners<\/a>.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Volkswagen said on Tuesday that its revenue was flat while operating profit fell 15 percent in 2024, citing \u201ca significant increase in fixed costs\u201d linked to restructuring. For this year, the company expects its operating profit margin to be in a range of 5.5 to 6.5 percent, roughly the same as the 5.9 percent margin it recorded last year.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cOur outlook reflects the global economic challenges and the profound changes that are happening in the industry,\u201d said Arno Antlitz, chief financial officer of Volkswagen. Among the challenges, he said, were \u201can environment of political uncertainty, expanding trade restrictions and geopolitical tensions.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-1\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">The company\u2019s restructuring costs included nearly $1 billion for a severance pay program linked to the administrative division of the Volkswagen brand. The company also reached an <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2024\/12\/20\/business\/volkswagen-union-deal-germany.html\" title=\"\">agreement last year<\/a> with the IG Metall union that included plans to cut 35,000 jobs through retirement and attrition, but without any immediate closures of the company\u2019s 10 factories in Germany.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-2\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">An Audi factory in Brussels closed its doors at the end of February, a decision that cost the company the equivalent of $1.75 billion that was written off last year. The plant, like those in Germany, was struggling with high labor and structural costs.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Volkswagen is shifting its production in Europe to Spain and Portugal, where energy and labor costs are significantly lower. A battery cell factory is planned in Valencia, and the automaker\u2019s new, entry-level electric model will be produced at a plant in Palmela.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">In the United States, Volkswagen has pinned its hopes on the revival of the Scout brand, which the company is betting will compete in the lucrative pick up truck market. It will include an all-electric model and another fitted with both a battery and a small combustion engine, known as a range extender.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-3\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Despite efforts by the Trump Administration to eliminate subsidies and tax breaks for electric cars, Volkswagen said that it remained committed to battery technology in all of its markets and that it expected to see demand for battery-powered cars increase in 2025.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Volkswagen faces the threat of U.S. tariffs, which Mr. Trump has said he plans to impose on imports from Europe as well as <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/article\/trump-tariffs-canada-mexico-china.html\" title=\"\">Canada and Mexico<\/a>. In addition to its assembly plant in Chattanooga, Tenn., Volkswagen has a plant in Puebla, Mexico, and is building a battery cell factory in Canada.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Oliver Blume, chief executive of Volkswagen, said he was waiting until a concrete tariff strategy emerged from Washington, and government officials in Brussels and Berlin staked out their positions before the company would begin talking with the Trump administration.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cWe will take up talks when the general framework is clear,\u201d Mr. Blume said.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-4\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Pointing to <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/03\/05\/us\/politics\/trump-lutnick-tariffs-reduction-canada-mexico.html\" title=\"\">the pushback from U.S. automakers<\/a> that led Mr. Trump to pause tariffs on cars and car parts from Canada and Mexico, Mr. Antlitz indicated that Volkswagen was also hopeful a resolution could be reached that reflected the complexity of the cross-border automobile industry in North America.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-5\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">\u201cIn the auto industry, you can\u2019t just localize a vehicle overnight,\u201d he said. \u201cWe will have to see what will happen.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Later that day, Mr. Trump <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/03\/11\/us\/politics\/trump-canada-tariffs-metal.html?smid=url-share\" title=\"\">escalated his fight with Canada<\/a>, saying that he would double tariffs on steel and aluminum imports and put tariffs on Canadian car imports so high that it would \u201cpermanently shut down the automobile manufacturing business in Canada.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">In China, another key market for Volkswagen, the German carmaker is struggling to compete with local competitors that have been quicker to tailor their offerings to customers who prize engaging software and entertainment in their cars. Volkswagen is expecting to see losses of up to 1 billion euros ($1.1 billion) in China this year, Mr. Antlitz said.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Last year, Volkswagen set up a joint venture with the Chinese carmaker XPeng, as part of its \u201cin China for China\u201d strategy, which it hopes will help it to claw back market share lost <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2024\/10\/31\/business\/volkswagen-china.html\" title=\"\">to competitors like BYD and Xiaomi<\/a>.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<p><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-6606220950177433\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- ItShrt World News -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-6606220950177433\"\r\n     data-ad-slot=\"1882483372\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\r\n<br \/>\n<br \/><a href=\"https:\/\/www.nytimes.com\/2025\/03\/11\/world\/europe\/volkswagen-tariffs-competition.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Volkswagen\u2019s earnings dropped last year and its profitability may improve only marginally this year, as the automaker repositions its global<\/p>\n","protected":false},"author":1,"featured_media":12147,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[332,304,114,151,135,763,338,134,113,111,1482],"class_list":["post-12146","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-world","tag-automobiles","tag-company-reports","tag-donald-j","tag-europe","tag-fees-and-rates","tag-germany","tag-international-trade-and-world-market","tag-prices-fares","tag-trump","tag-united-states-politics-and-government","tag-volkswagen-ag"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Volkswagen\u2019s Profit Under Pressure From Tariffs and Competition - World News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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