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Automotive — Business

What Caused Volkswagen's Profits To Drop In The Second Quarter

The company posted operating profit of €3.5 billion for the quarter and lowered its full-year revenue outlook from expected growth to a possible 3% decline

,   and  TIPP Staff
2 min read
Photo by Cesar Salazar / Unsplash

Volkswagen reported a nearly 10% decline in second-quarter operating profit as the German automaker intensified efforts to cut costs and strengthen its position against growing competition from Chinese electric vehicle manufacturers, according to CNN.

The company posted operating profit of €3.5 billion for the quarter and lowered its full-year revenue outlook from expected growth to a possible 3% decline. CEO Oliver Blume cited geopolitical tensions, trade disputes, stricter regulations, volatile markets and rising competition as key challenges facing the industry.

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According to the report, Volkswagen is considering one of the largest restructuring programs in its history. The company had already announced plans to eliminate 50,000 jobs in Germany by 2030 and is now evaluating an additional 50,000 global job cuts along with the possible closure of four German factories.

The report said labor union IG Metall opposes the proposed reductions, while analysts argue Volkswagen must move faster and reduce costs if it hopes to compete effectively with rapidly expanding Chinese electric vehicle manufacturers.

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