Volkswagen Slashes Annual Forecast Amidst Weak Sales

Volkswagen has reduced its annual forecast for the second time in three months due to poor performance in its passenger car division. The company now expects lower profit margins and sales in 2024. The announcement coincides with crucial talks with IG Metall over pay and job protection.

Volkswagen has lowered its annual forecast for the second time in less than three months, attributing the revision to an underperformance in its passenger car division. Europe's leading automaker is under increasing pressure as the automotive market struggles, especially in China.

The announcement comes shortly after Volkswagen began significant negotiations with Germany's powerful union, IG Metall, regarding pay and job security. These talks have historic implications, potentially leading to the first-ever factory closures for the German carmaker.

Volkswagen now predicts a profit margin of about 5.6% for 2024, down from its previous estimate of 6.5-7%, and lower than the 6.5% forecast by LSEG. The company also expects sales to decline by 0.7%, reaching 320 billion euros, contrary to initial projections of up to a 5% increase.

(With inputs from agencies.)