Volkswagen, deficit of 8 trillion won in the third quarter... Sales in China plummeted by 38%

(Berlin = Yonhap News) Correspondent Gye-yeon Kim = Volkswagen Group, a German automobile company suffering from management difficulties, recorded a loss again for the first time in four quarters.

Volkswagen Group announced in its earnings announcement on the 29th (local time) that it had a net loss after tax of 5.822 billion euros (about 8.67 trillion won) in the third quarter of this year.

Sales amounted to 75.277 billion euros (approximately 112.14 trillion won), down 6.3% from the third quarter of last year, and operating profit margin also fell from -1.6% to -7.8% over the same period.

The delivery volume was 1.885 million units, a decrease of 14.3% over the past year. Deliveries decreased in all regions except Central and Eastern Europe, with the largest decrease at 38.5% in China, where 405,800 units were sold.

Volkswagen recorded a net loss of 1.072 billion euros (about 1.6 trillion won) in the third quarter of last year for the first time since the COVID-19 pandemic.

This quarter, the deficit increased as the company reflected impairment losses of approximately 6 billion euros (approximately 8.9 trillion won) due to the decline in the book value of sports car brand Porsche, in addition to the continued slump in the Chinese market and various restructuring costs.

Last month, taking these circumstances into consideration, Volkswagen lowered its operating profit ratio forecast for this year from 4.0-5.5% to a maximum of 1%.

Volkswagen recently prepared a restructuring plan that includes reducing its global workforce by up to 100,000 people and examining other ways to utilize its expensive factories in Germany, with the goal of raising its operating profit margin to 8-10% by 2030.

Chief Financial Officer (CFO) Arnaud Antlitz said, “Our performance over the past nine months this year clearly shows that we must act quickly and decisively without wasting time,” adding that the company will continue cost-cutting measures such as job cuts, plant efficiency, and vehicle lineup reduction.