{"id":12806,"date":"2024-09-29T05:50:48","date_gmt":"2024-09-29T05:50:48","guid":{"rendered":"https:\/\/topat10.com\/?p=12806"},"modified":"2024-09-29T05:50:48","modified_gmt":"2024-09-29T05:50:48","slug":"volkswagen-cuts-forecasts-again-as-demand-wanes-while-ev-competition-ramps-up","status":"publish","type":"post","link":"https:\/\/topat10.com\/?p=12806","title":{"rendered":"Volkswagen cuts forecasts again as demand wanes while EV competition ramps up"},"content":{"rendered":"\n<p><a href=\"https:\/\/fortune.com\/company\/volkswagen\/\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/company\/volkswagen\/\" rel=\"noopener\">Volkswagen<\/a> AG cut its guidance for a second time this year, warning that waning demand will undercut the German carmaker\u2019s profitability as it squares off with unions over possible job cuts and unprecedented plant closures.\u00a0<\/p>\n<div>\n<p>The manufacturer said Friday that it now sees an operating margin of 5.6%. That\u2019s down from a prediction of as much as 7% in July, when VW previously\u00a0<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-07-09\/vw-cuts-forecast-on-plant-closure-additional-expenses\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/www.bloomberg.com\/news\/articles\/2024-07-09\/vw-cuts-forecast-on-plant-closure-additional-expenses\" rel=\"noreferrer noopener\">lowered<\/a>\u00a0its expectations, partly due to expected costs from closing an Audi plant in Belgium. Net cash flow in the automotive division is now expected to be less than half the level the company had foreseen.<\/p>\n<p>All three major German carmakers \u2014 Volkswagen, <a href=\"https:\/\/fortune.com\/company\/daimler\/\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/company\/daimler\/\" rel=\"noopener\">Mercedes-Benz Group<\/a> AG and BMW AG \u2014 have now warned about their profit this month. They\u2019re each struggling with slower sales in China, where buyers are holding back because of a deepening real estate crisis. Rising competition in electric vehicles also is driving steep discounts and crimping margins, all while declining consumer confidence saps demand for combustion-engine cars.<\/p>\n<p>Volkswagen\u2019s outlook cut adds to the challenges for Chief Executive Officer Oliver Blume, who has warned that costs in Germany are too high as EV growth slows and Chinese manufacturers led by <a href=\"https:\/\/fortune.com\/company\/byd-2\/\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/company\/byd-2\/\" rel=\"noopener\">BYD<\/a> Co. push into Europe.\u00a0<\/p>\n<p>The company is considering plant closures in Germany for the first time in its history and has scrapped decades-long job security pledges as it tries to become more competitive. Executives have flagged about two car plants\u2019 worth of excess capacity, which put them on course for a protracted conflict with powerful labor groups.<\/p>\n<p>\u201cThe news aids the VW brand\u2019s case to close overcapacity in Germany,\u201d Bloomberg Intelligence analyst Giacomo Reghelin said. \u201cAs with Mercedes, we expect further profit warnings to follow.\u201d<\/p>\n<p>VW now expects net cash flow in the automotive division to reach around \u20ac2 billion ($2.2 billion), down from as much as \u20ac4.5 billion previously, partly because of M&amp;A activities including a partnership with Rivian Automotive Inc. on EV technology.<\/p>\n<p>Volkswagen said its namesake passenger-car brand and its commercial vehicles unit are performing below expectations. It flagged added risks for its high-volume carmaking group, which also includes Skoda and Seat, citing a \u201cdeterioration in the macroeconomic environment.\u201d<\/p>\n<p>The company\u2019s global deliveries will drop to around 9 million units this year, from 9.24 million in 2023, VW said Friday. The automaker had previously forecast a 3% increase.<\/p>\n<p>Earlier this month, rival BMW warned its 2024 earnings would be\u00a0<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-09-10\/bmw-cuts-guidance-after-faulty-components-prompt-recall\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/www.bloomberg.com\/news\/articles\/2024-09-10\/bmw-cuts-guidance-after-faulty-components-prompt-recall\" rel=\"noreferrer noopener\">significantly lower<\/a>\u00a0than a year ago after a faulty braking system from supplier Continental AG prompted a recall and halt to deliveries of some 1.5 million vehicles. The auto-making operating margin would be as low as 6%, compared to a previous low of 8%, the company forecast.<\/p>\n<p>Mercedes-Benz followed with its own\u00a0<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-09-19\/mercedes-cuts-earnings-outlook-as-auto-sales-in-china-falter\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/www.bloomberg.com\/news\/articles\/2024-09-19\/mercedes-cuts-earnings-outlook-as-auto-sales-in-china-falter\" rel=\"noreferrer noopener\">warning<\/a>\u00a0as the deepening rout in China hurt sales of its most expensive models like the S-Class and Maybach sedans. Adjusted returns this year would be between 7.5% and 8.5%, compared with an earlier forecast of as much as 11%, and earnings before interest and taxes will be \u201csignificantly below\u201d the prior year level, the automaker said last week.\u00a0<\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Volkswagen AG cut its guidance for a second time this year, warning that waning demand will undercut the German carmaker\u2019s profitability as it squares off with unions over possible job cuts and unprecedented plant closures.\u00a0 The manufacturer said Friday that it now sees an operating margin of 5.6%. That\u2019s down from a prediction of as [&hellip;]<\/p>\n","protected":false},"author":610,"featured_media":12807,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[123],"tags":[],"class_list":["post-12806","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Volkswagen cuts forecasts again as demand wanes while EV competition ramps up | Unlock Informed Choices with Us<\/title>\n<meta name=\"description\" content=\"The automaker trimmed its operating margin, global deliveries, and automotive cash flow guidance.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" 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That\u2019s down from a prediction of as&hellip;","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts\/12806","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/users\/610"}],"replies":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12806"}],"version-history":[{"count":0,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts\/12806\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/media\/12807"}],"wp:attachment":[{"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12806"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}