Volkswagen cuts full-year operating margin guidance to 1%; shares down 7.5%

Volkswagen shares are down 7.5 per cent in Friday trading after the cut. The new target is far below the 4 per cent to 5.5 per cent range the company had held even after cutting its revenue forecast in July.

Volkswagen has lowered its full-year operating return on sales guidance to 1 per cent, down from the 4 per cent to 5.5 per cent range it had set earlier this year. Its shares were down 7.5 per cent in Friday trading after the cut.

The company had defended that range as recently as July 24, even as it cut its revenue forecast. On July 24 shares fell as much as 3.2 per cent before recovering some ground, according to Global Banking & Finance Review. Volkswagen's operating return on sales was 2.8 per cent for all of 2025. In the first half of 2026 it was 3.8 per cent, down from 4.2 per cent in the same period the year before, according to Volkswagen's own results reported by Yahoo Finance.

German Vice Chancellor Lars Klingbeil said he is grateful for the restructuring agreement Volkswagen struck this year but does not see it as the end of the company's overhaul.

The scale of the cut, a drop of 75 per cent to 80 per cent from the previous guidance, marks a sharp downgrade even as Volkswagen presses ahead with the restructuring plan that had initially lifted its stock. Taken together with warnings about the company's credit rating and estimates that the overhaul could cost 16 billion euros, the margin collapse suggests the turnaround will take longer and cost more than markets had priced in when the restructuring was first announced.