Volkswagen Group experienced a sharp decline in profit for the last fiscal year.

On March 10, local time, the German automotive giant Volkswagen Group disclosed its financial performance for the previous year. The financial report indicates that the group achieved sales revenue of 321.9 billion euros, nearly unchanged compared to 324.7 billion euros in the preceding year. The group's operating profit stood at 8.9 billion euros, a decrease of 53% year-on-year, marking the lowest level since 2016, with an operating profit margin of 2.8%. Net profit after tax fell by 44.3% to 6.9 billion euros.

Volkswagen attributed the decline in operating profit primarily to factors including US tariffs, expenses related to strategic adjustments for Porsche products, foreign exchange impacts, and changes in pricing and product mix. The effective implementation of performance programs partially offset these pressures.

According to the report, after excluding special items, the group's operating profit was 14.8 billion euros. Excluding both special items and the impact of US tariffs, the operating profit reached 17.7 billion euros, corresponding to an operating profit margin of 5.5%.

Due to profits falling to their lowest point in nearly a decade, Volkswagen announced plans to reduce its workforce in Germany by 50,000 employees by 2030.

The group had already reached an agreement with labor unions at the end of the preceding year, planning to cut 35,000 jobs under its core Volkswagen brand by 2030 as part of a strategy to achieve annual savings of 15 billion euros. The additional job reductions will come from premium brands such as Audi and Porsche, as well as Volkswagen's software subsidiary, Cariad.

Oliver Blume, Chairman of the Board of Management of Volkswagen Group, noted that Chinese automakers are setting their sights on the European market, attempting to escape fierce domestic price competition through exports, which will increase pressure on Volkswagen.

"We need to be prepared for price pressures. This is prompting us to invest significant effort in cost control," he stated.

In terms of sales, the group's global vehicle deliveries were nearly 9 million units, a slight decrease of 0.5% compared to the previous year. Sales in Europe grew by over 4% year-on-year, while North American sales declined by 10%. In China, annual sales decreased by 8% to 2.6938 million vehicles, yet China remained the group's largest single market globally.

Looking ahead to the current year, Volkswagen Group forecasts sales revenue growth between 0% and 3% year-on-year, with an expected operating profit margin in the range of 4% to 5.5%.

Simultaneously, the group emphasized that it anticipates continued challenges from multiple fronts, primarily stemming from macroeconomic conditions, uncertainties in international trade restrictions, tense geopolitical situations, intensifying market competition, volatility in commodity, energy, and foreign exchange markets, as well as higher compliance requirements related to emissions regulations.

In the Chinese market, the current year is pivotal for accelerating the implementation of Volkswagen Group's strategic transformation outcomes. The group plans to launch more than 20 all-electric, plug-in hybrid, and extended-range models in China.