Volkswagen has downgraded its 2024 financial outlook amid significant challenges, marking a difficult period for the automotive giant. Facing high production costs, slow progress in its transition to electric vehicles (EVs), and rising competition in key markets like China, VW has warned of potential factory closures in Germany, a move that could lead to major job cuts.
Key Updates:
- Revenue Forecasts: VW now expects 2024 revenues to be around €320 billion, down from earlier projections of a 5% increase over 2023’s €322.3 billion.
- Vehicle Deliveries: The company anticipates delivering around nine million vehicles, scaling back from a previous goal of up to 3% growth over 2023’s 9.24 million vehicles.
- Operating Return on Sales: VW reduced its projected operating return on sales to 5.6%, from a previously forecasted range of 6.5% to 7.0%.
The company’s financial struggles are exacerbated by a deteriorating macroeconomic landscape, particularly in Germany and the broader eurozone. China, which accounts for about one-third of VW’s sales, is also facing economic challenges, further dampening VW’s outlook.
Volkswagen had previously shocked its workforce with warnings of potential factory closures and job cuts, especially in Germany, where it employs around 300,000 workers. These measures have met with fierce opposition from unions, which have vowed to resist any drastic cuts. Despite this, VW leadership argues that restructuring is essential to maintaining the company’s global competitiveness.
The forecast cuts highlight the urgency of VW’s restructuring efforts, as the automaker seeks to navigate a complex and rapidly evolving market environment.
