Volkswagen H1 Operating Profit Falls 11.6% as China Deliveries Drop 25.9%

Volkswagen Group published its first-half results on July 24, 2026. Revenue for the period was 158.1 billion euros, roughly flat against 158.4 billion euros a year earlier. Operating profit fell 11.6% to 5.931 billion euros, and the operating margin declined to 3.8% from 4.2%. Net profit after tax dropped 30.7% to 3.1 billion euros. In the second quarter, revenue rose 2% to 82.444 billion euros, while operating profit declined 9.5% to 3.47 billion euros.

Over a longer horizon, Volkswagen Group deliveries fell from 9.24 million vehicles in 2023 to 8.98 million in 2025, a decline of 2.8%. Operating profit, however, dropped from 22.6 billion euros to 8.9 billion euros over the same period, a fall of about 60%. Chief Executive Oliver Blume said the automotive industry continues to face severe challenges, with geopolitical risks, trade conflicts, stricter regulation and intensifying competition all weighing on operations. The group's plan to cut roughly 50,000 jobs remains in progress, with the final scale still under assessment. Chief Financial Officer Arno Antlitz noted that Chinese competitors are expanding exports and adding competitive pressure in Europe, and that Volkswagen's current planned measures are insufficient to meet this challenge.

According to data from German automotive data and consulting firm Dataforce, Chinese automakers accounted for 2.6% of European sales in 2023. By May 2026, their European sales reached about 138,400 vehicles, lifting their market share to 12.0%, surpassing for the first time the combined 11.3% share of six Japanese automakers in Europe.

By region, Volkswagen Group deliveries grew in Europe, North America and South America in the first half of 2026, but China deliveries fell 25.9% to 971,000 units. FAW-Volkswagen cumulative sales in the first half were about 558,000 units, down 25% year on year. Among Japanese brands, Toyota China sold 694,700 units in the first half, down 17.1%; Nissan China sold 237,000 units, down 15%; and Honda China sold 205,800 units, a sharp decline of 34.7%. Among US brands, SAIC-GM cumulative sales fell 5.7% to 231,200 units, while Changan Ford retail sales in China were 28,800 units, down about 39% from 47,000 units in the same period last year.

Volkswagen Group's management board has submitted key measures to the supervisory board, including streamlining the product lineup by up to 50% and cutting optional equipment combinations by up to 75%. The group plans to reduce global annual capacity from about 10 million vehicles to roughly 9 million. Ralf Brandstätter, Chairman and CEO of Volkswagen Group China, said Volkswagen China continued its product offensive in the first half, strengthening local technology capabilities and cost competitiveness, but the market environment in China remains challenging.