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Volkswagen expects revenue to improve amid restructuring costs and trade risks
VW’s revenue and profit issues have been compiled by restructuring costs that have put an additional financial strain on the company’s operations. (3 min. read)
Marcus Amick
March 12, 2025
Volkswagen’s Chief Financial Officer Arno Antlitz via Bloomberg
Volkswagen’s global footprint—once its greatest strength—is now a growing challenge as shifting trade policies and fierce Chinese competition squeeze profits.
By the numbers: The automaker saw earnings drop last year and, despite efforts to reposition its business, profitability is expected to improve only marginally in 2025 as VW maps out the road ahead.
VW’s revenue in 2024 was flat while its operating cost fell 15% due to what the company attributes to “a significant increase” in fixed costs, reports The New York Times.
The company projects that its operating profit margin in 2025 will be between 5.5% to 6.5%, which aligns with last year’s profit margin of 5.9%.
VW is expecting losses of up to $1.1 billion this year in China, a key market for the company.
What they’re saying: Speaking to CNBC’s Annette Weisbach on Tuesday, Volkswagen’s Chief Financial Officer Arno Antlitz said, “We are a global company. We opt for open markets, I’m sure you can imagine what we think about tariffs. What I can say [is] we already feel like an American company… We employ tens of thousands of people in Volkswagen Group of America… So we are an all-American company already, and we want to grow in the U.S.”
Between the lines: Volkswagen currently operates one of its largest plants in Puebla, Mexico, and is building a battery cell factory in Canada, which would likely be impacted by the tariffs. In fact, 44% of VW Group’s products are made in Mexico.
"Volkswagen Group is the most exposed carmaker to the tariffs on Mexico," said JATO Global Analyst Felipe Munoz (via Inside EVs)
Zooming in: VW’s revenue and profit issues have been compiled by restructuring costs that have put an additional financial strain on the company’s operations, with the potential for tariffs to further exacerbate those issues, according to Antlitz.
Volkswagen’s restructuring included nearly $1 billion for a severance pay program tied to the VW brand’s administrative division.
A decision to close an Audi factory in Brussels at the end of February reportedly cost the company $1.75 billion, which was written off in 2024.
Why it matters: With profits shrinking in China and Europe offering little growth, VW is counting on the U.S. to keep it afloat. North American sales climbed 6%, with VW brand sales in the U.S. surging 15.2%—finally, a foothold in a market that’s long eluded the automaker. But with tariffs looming, that momentum could vanish.
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