Volkswagen, Europe's largest automaker, reported a sharp 28.4% drop in net profit to €1.56 billion ($1.82 billion) for the first quarter of 2026, with revenue slipping 2.5% to €75.7 billion. The company cited weak global demand, geopolitical tensions, trade barriers, stricter regulations, and fierce competition as key headwinds.

Deliveries fell 4% to 2.05 million vehicles, with declines in China and the US outweighing gains in Europe. CFO Arno Antlitz warned that rising tariffs alone are adding around €4 billion in annual costs, and existing cost-cutting plans are no longer sufficient. The company plans to cut 50,000 jobs in Germany by 2030.

Results were also hit by weaker performance at subsidiaries Porsche and Traton, both reporting significant profit declines. CEO Oliver Blume stated that the company will step up savings efforts and overhaul its business model to restore profitability after last year's steep earnings slump.

Meanwhile, Germany is bracing for weak economic growth figures for the first quarter, with economists expecting minimal expansion at best. The Iran war is driving up energy costs and uncertainty, adding pressure on the already fragile economy. Official GDP data is due imminently.

The dual challenges of a struggling automotive giant and sluggish economic growth underscore the broader difficulties facing Germany's export-oriented economy amid global trade disruptions and geopolitical instability.

Source: www.dw.com