On September 29, German automaker Volkswagen lowered its annual performance expectations for the second time within three months, attributing the change to underperformance in its passenger car segment. This development adds to the challenges faced by one of Europe's leading automakers.
Volkswagen now forecasts a profit margin of approximately 5.6% for 2024, down from the previously estimated 6.5%-7% and also lower than London's stock exchange prediction of 6.5%. Additionally, the company's sales are expected to decline by 0.7% to 320 billion euros ($356.7 billion), contrary to the initial projection of up to a 5% increase.
The company cited challenging market conditions and underwhelming performance, particularly from its Volkswagen passenger cars, Volkswagen commercial vehicles, and technical components brands, as reasons for the downward revision. Global car deliveries are also expected to fall to around 9 million units, below the earlier target of 3% growth over the 9.24 million units predicted for 2023.
Volkswagen's ratings outlook has been downgraded as well, impacting its majority stake in Porsche SE and its partnership with truck giant Traton. Porsche SE, which holds the majority voting rights in Volkswagen and is its largest single shareholder, also saw its stock affected.
Due to these revised forecasts, Volkswagen and Porsche SE shares traded in Frankfurt fell by 0.7% and 1.6%, respectively.
Volkswagen is scheduled to release its third-quarter results on October 30. The company currently expects net cash flow from its automotive division to be around 2 billion euros, down from the previous forecast of 2.5 billion to 4.5 billion euros.
