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Volkswagen's net profit plunged 30.6 percent to €12.4 billion ($13.4 billion) in 2024, the German auto giant reported Tuesday, citing high production costs and intense Chinese competition. Despite a slight increase in sales to €324.7 billion, the struggling automaker faced a difficult year.
The poor results were due to a "significant increase in fixed costs" and one-off expenses totalling 2.6 billion euros, primarily aimed at restructuring, the company said. Volkswagen has been hit hard not just by rising costs but also a stuttering switch to electric vehicles, where it faces stiff competition from Chinese rivals.
The 10-brand group, whose models range from Audi to Seat and Skoda, had a particularly difficult 2024, marked by a long dispute with unions that ended with a deal in December to cut 35,000 jobs in Germany by 2030.
The carmaker ultimately decided against closing factories at home for the first time ever, but its problems nevertheless highlighted a broader crisis buffeting Europe's ailing auto industry as it struggles to keep pace with rapid changes.
Highlighting Volkswagen's difficulties, its deliveries last year to China -- its single biggest national market -- fell almost 10 percent, even as they were flat or rose in the rest of the world. The weakness in China was behind an overall 3.5-percent drop in unit sales, with Volkswagen only shifting around nine million vehicles worldwide last year.
Cost pressures also squeezed Volkswagen's profit margins down to 5.9 percent in 2024, from some seven percent the previous year. The outcome was somewhat better than feared by the group, which midway through last year predicted a margin of some 5.6 percent for 2024. "Consistently reducing costs and increasing profitability" was key for the firm going forward, Volkswagen finance chief Arno Antlitz said in a statement.
