Tumbling operating profit, a lower dividend and slightly increased sales revenue were among the announcements from struggling German carmaker VW in its latest earnings report for 2024. 

Volkswagen’s operating profit was down by 15% compared to 2023 and came in at €19.1bn. 

The negative result was partly due to fixed costs, which swelled to €2.6bn, much of which was spent on restructuring.

VW expects its operating margin, which hit 5.9% in 2024, to be between 5.5% and 6.5% this year.

“In a challenging competitive environment, we achieved a decent overall financial performance in 2024,” Arno Antlitz, CFO & COO of Volkswagen Group, said in a statement. 

The parent company of major European brands, including Porsche, Lamborghini,= and Skoda, sold 9 million vehicles worldwide, 3.5% below the previous year. The company saw growth in South America but that could not fully offset the decline in China. Meanwhile, vehicle sales in North America and Europe were stable. 

The group’s sales revenue was €324.7bn, slightly up, by 1%, from the previous year, driven by the financial services business. VW expects sales revenue to increase by 5% in 2025, sending the message to investors that the worst could be over.

The carmaker has been struggling to keep the business profitable due to high energy prices and other manufacturing costs, cheaper Chinese competition, emissions-related regulations, and geopolitical tensions. 

In December, VW announced that it would cut around 35,000 jobs in Germany until 2030, as part of its restructuring plan. 

According to the earnings report, the Board of Management and Supervisory Board are proposing a dividend of €6.30 per ordinary share and €6.36 per preferred share to the Annual General Meeting, a 30% cut compared to 2023. 

Investors reacted slightly positively to Volkswagen AG’s 2024 results, with the share price climbing by more than 2% in the first hour after trading opened in Frankfurt.

What is VW bracing for in 2025?

In 2025, VW aims to boost productivity and increase profitability, group CEO Oliver Blume said, adding that VW wants to be “the global automotive technology driver by 2030”.

However, the carmaker acknowledges that challenges are arising from political uncertainty, increasing trade restrictions and geopolitical tensions. 

Volkswagen AG is also bracing for increasing intensity of competition, volatile commodity, energy and foreign exchange markets, and more stringent emissions-related requirements. 

“We keep combustion engines technologically competitive, we are simultaneously investing in electric models and software, and we continue to strengthen our regional presence – with a clear growth and investment strategy in the US,” Antlitz said.

“The current outlook does not include possible effects from the indirect introduction or adjustment of trade tariffs”, nor from “the possible relaxation of CO2 regulations in Europe,” Antlitz also noted.