In a market-shaking development Volkswagen reports its quarterly profits dropped to €1.6bn - a whopping 64% decrease from last years results. The companyʼs sales dropped by point-five percent to €78.5bn while car deliveries went down to 2.2m units
The German car-maker faces tough competition in China where local brands like BYD NIO and Xiaomi are taking over with their tech-savvy electric vehicles. The companys deliveries in the worlds largest auto market fell by 10% since the start of the year (which matches Toyotaʼs similar problems in the region)
European operations arent doing better - government rules about emissions force car-makers to sell less-profitable electric cars. The situation got more complex when EU-China trade issues started: Beijing might add new taxes for European cars as pay-back for EUʼs restrictions on Chinese imports
Oliver Blume VWs chief exec thinks the company needs big changes to stay strong. Management wants to:
- Close three German plants
- Cut thousands of jobs
- Lower worker pay by 10%
- Build new battery factories
Our results reflect a challenging market environment and underline the importance of delivering on the performance programs
Union leader Daniela Cavallo started new talks with management about these plans; she hints at possible worker protests if the company doesnt change its mind