By Dominic Chopping

Volkswagen shares jump after the German automaker said cash flow and liquidity last year came in above company guidance.

At the same time, the auto sector in general received a boost Thursday after President Trump walked back from plans to slap fresh tariffs on European goods.

Shares were 5.6% higher in early European trade.

Volkswagen said late Wednesday that net cash flow at its automotive business landed at around 6 billion euros ($7.01 billion) in 2025, versus company guidance of around breakeven.

Net liquidity in the unit also beat expectations, coming in at more than 34 billion euros at year-end compared to the 30 billion euros it had guided for.

Lower working capital and lower-than-anticipated capital expenditure and research-and-development investments drove the results, it said.

"We have long hoped VW could cut spending below the 38 billion euros peak levels - this announcement provides some proof that the VW plans are working," Citi analysts said in a note to clients.

"Disappearance of Greenland tariffs should also help VW and the sector," Citi added.

Trump had threatened a 10% tariff on goods from several European countries from Feb. 1, before rising to 25% from June 1, as he tried to pressure Denmark into selling Greenland to the U.S. That had sent shares in European automakers lower at the start of the week.

However, following talks with NATO Secretary-General Mark Rutte in Davos, Trump called off the tariffs, saying he had "formed the framework of a future deal" with respect to Greenland.

Aston Martin shares rose 3.4% while Porsche and Mercedes-Benz gained 2.6%. Shares in BMW, Stellantis and Volvo Car all gained over 1.5%.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

January 22, 2026 04:46 ET (09:46 GMT)

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