Volkswagen Group's First Quarter Profits Plummet by 40.6%

2024 was a challenging year for the Volkswagen Group, and 2025 does not seem to promise a smoother path. By the end of the first quarter, the financial results of Europe's largest manufacturer revealed a 40.6% drop in net profit, closing March with 2.186 billion euros.

The consortium has witnessed a decline in its business profitability as it grapples with rising costs and excess capacity in its European factories, along with reduced demand in China, one of its largest markets. Additionally, Donald Trump's import tariffs threaten to further squeeze margins, not to mention a waning appetite for electric vehicles.

The conditions are similar for other automotive manufacturers, with several, including Porsche, Volvo, and Stellantis, already cutting their financial forecasts for 2025. The Volkswagen Group has not yet done so but indicated that the 5% revenue increase it anticipated did not account for Donald Trump's tariffs.

In its annual results presentation, the manufacturer stated it expected operating margins to range between 5.5% and 6.5%, but this year they are likely to be closer to the lower end.

On April 29, the US government approved an executive order reducing the impact of tariffs on the automotive industry, primarily by eliminating duties on certain components and preventing multiple tariffs from accumulating on a single vehicle. This would benefit the manufacturer's plants in Chattanooga (USA) and Puebla (Mexico).

In terms of revenue, the Volkswagen Group reached 77.558 billion euros in the first three months of 2025, a 2.8% increase compared to the previous year. Registrations also saw a slight increase of 1.9%, surpassing two million units.

Of these figures, 1.1 million corresponded to Volkswagen brand models (+5.1%). Skoda and Seat/Cupra also reported strong results, with respective growths of 8.2% and 5.9%, and volumes of 238,627 and 146,731 units.

Conversely, Audi, the group's second-largest brand by volume, fell by 3.4% to 385,401 registrations. Porsche also declined by 7.9%, and Bentley by 4.7%. Notably, Volkswagen's commercial vehicles plummeted by 22.9%.

China remains in recession, with a 7.1% decrease compared to last year, but the manufacturer highlights other markets with potential, such as India (+36.6%), Turkey (+13.5%), and South America (+17.6%).