By Christoph Steitz and Christina Amann
FRANKFURT/BERLIN (Reuters) -Volkswagen cut its annual outlook for the second time in less than three months on Friday, citing a weaker-than-expected performance at its passenger car division as pressure on Europe’s top automaker continues to rise.
The outlook cut is the latest from Germany’s car giants, with Mercedes-Benz (OTC:) and BMW (ETR:) both downgrading their annual forecasts earlier this month as a result of weakening demand in China, the world’s biggest car market.
It also comes two days after Volkswagen (ETR:) kicked off crucial talks with IG Metall, Germany’s most powerful union, over pay and job protection, a historic conflict that could lead to the first German factory closures in the carmaker’s history.
Volkswagen now expects a profit margin of around 5.6% in 2024, down from 6.5-7% previously and below the 6.5% LSEG estimate, while sales are expected to fall by 0.7% to 320 billion euros ($356.7 billion) after the company had initially expected an increase of up to 5%.
Volkswagen said it was cutting its outlook “in light of a challenging market environment and developments that have fallen short of original expectations, particularly at the brands Volkswagen Passenger Cars, Volkswagen Commercial Vehicles and Tech. Components”.
The German car maker, which owns majority stakes in Porsche AG and truck giant Traton, also cut its outlook for global deliveries to around 9 million, having previously expected a rise of up to 3% from the 9.24 million vehicles in 2023.
($1 = 0.8971 euros)
