Volkswagen Faces Profit Warning and Potential Audi Plant Closure

Volkswagen Faces Profit Warning and Potential Audi Plant Closure

Elena Martinez
2 min read

Volkswagen Faces Profit Warning and Potential Audi Plant Closure

Volkswagen's shares plummeted after the company issued a profit warning and hinted at the potential closure of an Audi plant in Brussels. The automaker revised its operating return on sales forecast down to 6.5% to 7%, from the previous 7% to 7.5%, as demand for the Audi Q8 e-tron, an electric vehicle, plummeted. European automakers, including Volkswagen, suffer from declining electric vehicle sales, worsened by competition from state-subsidized Chinese rivals.

The potential shutdown of the Brussels plant, which employs 3,000 people, could be Volkswagen's first factory closure in nearly four decades. The company estimates that the closure or repurposing of the site could cost up to 2.6 billion euros ($2.81 billion) in operating profit for the 2024 fiscal year. Deutsche Bank analysts see the potential shutdown as a positive move in the long term.

Audi, a division of Volkswagen, has been identified as a major concern for investors due to delays in new model launches and an aging portfolio. The average age of Audi's models is now six years, compared to three years for BMW and 3.6 years for Mercedes. Volkswagen's overall deliveries have also slumped, with a 3.8% decline globally in the second quarter, and a steeper 11.3% drop for Audi. Deliveries to China fell by 19.3% in the same period, while there were slight increases in Western Europe and North America.

Key Takeaways

  • Volkswagen revises operating return on sales forecast to 6.5%-7%.
  • Potential shutdown of Brussels Audi plant could cost VW up to €2.6 billion in 2024 operating profit.
  • Audi lags in new models, with an average portfolio age of six years.
  • Volkswagen's deliveries globally down 3.8% in Q2, with a 19.3% drop in China.


Volkswagen's profit warning and potential Brussels plant closure stem from weak Audi Q8 e-tron sales and fierce Chinese EV competition. This move could impact 3,000 jobs and cost up to €2.6 billion. Short-term effects include stock dips and financial strain, while long-term consequences may involve restructuring and innovation challenges. Investors and European automakers face uncertainty, with Volkswagen needing strategic adjustments to regain market share and investor confidence.

Did You Know?

  • Operating Return on Sales (ROS):
    • Explanation: Operating Return on Sales (ROS) is a financial ratio that measures the percentage of profit a company generates from its operations before accounting for interest and taxes. A lower ROS indicates operational inefficiencies or market challenges.
  • Audi Q8 e-tron:
    • Explanation: The Audi Q8 e-tron represents Audi's efforts to compete in the rapidly growing EV market. Its weak demand highlights the challenges European automakers face in this sector, particularly against state-subsidized Chinese rivals.
  • State-subsidized Chinese rivals:
    • Explanation: These refer to Chinese automotive companies that receive financial support from the Chinese government, making it harder for non-Chinese automakers to compete.

You May Also Like

This article is submitted by our user under the News Submission Rules and Guidelines. The cover photo is computer generated art for illustrative purposes only; not indicative of factual content. If you believe this article infringes upon copyright rights, please do not hesitate to report it by sending an email to us. Your vigilance and cooperation are invaluable in helping us maintain a respectful and legally compliant community.

Subscribe to our Newsletter

Get the latest in enterprise business and tech with exclusive peeks at our new offerings