UPDATE 2-Volkswagen forecasts easing margin pressure in 2026 after profit slump

Adds FY numbers, CFO quote

By Rachel More

WOLFSBURG, Germany, March 10 (Reuters) - Volkswagen VOWG_p.DE expects its dwindling profit margin to recover somewhat this year but warns of a possible further stagnation in sales after a bruising 2025 hit by tariffs, tough competition from China and a costly shift towards electric.

The German auto group said it expects an operating margin of between 4 and 5.5% in 2026, after it stood at 2.8% in 2025.

Last year's margin came in slightly below an expected 2.9%, according to analysts polled by Visible Alpha, and slumped from 5.9% a year earlier.

Like its rivals, Volkswagen has been battling challenges across key markets, with U.S. tariffs costing the company billions and local competition eating into its market share in China.

"We are operating in a fundamentally different environment," CEO Oliver Blume said in a statement.

The carmaker's operating profit more than halved in 2025 to 8.9 billion euros, missing an analysts' forecast of 9.4 billion euros.

Revenue stagnated at 322 billion euros, with scant hopes for growth in 2026, when the company expects revenue to develop in a range of 0% to 3%.

CFO Arno Antlitz said product launches and restructuring measures in 2025 were important to boost Volkswagen's resilience.

"But the operating margin of 4.6% adjusted for restructuring is not sufficient in the long run," he added.


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