According to the latest media reports, Volkswagen Group's operating profit for the second quarter of 2024 fell by 2.4%, as the automaker continues to cut costs and reshape its model lineup.
On August 1st, the company announced that its earnings before interest and taxes (EBIT) for the period from April to June were €5.46 billion (approximately $5.91 billion). The operating return on sales dropped to 6.6%, down from 7% a year earlier. In Volkswagen Group's core business, which includes the Volkswagen, Skoda, and SEAT brands, profitability fell to 5%.
Chief Financial Officer Arno Antlitz stated, "Given our range of outstanding models, brand portfolio, and global reach, this result is below our expectations."
In a statement, Arno Antlitz said, "To achieve our goals, we must make significant efforts in cost management in the second half of the year and beyond."
Volkswagen Group is counting on a record number of model launches in the second half of the year to achieve its targets. The Volkswagen brand is also continuing to push forward with a cost-cutting plan to improve returns.
The group lowered its operating return on sales forecast to a range of 6.5%-7.0% in July, citing increased expenses due to the potential closure of the Brussels Audi plant and a 3.8% drop in second-quarter sales.
Volkswagen stated that new car orders have been booked through the fourth quarter, but the automaker's financial situation is being impacted by several factors, including increased provisions for ongoing severance plans and rising fixed costs.
