Volkswagen Cuts 2026 Sales Forecast, Now Sees Deliveries Falling Up to 7%

Since Volkswagen confirmed earlier this month it may cut up to 100,000 jobs, twice the number first floated, the company used its Friday, July 24 earnings report to spell out just how bad the underlying business has gotten.

Operating profit for the April-to-June quarter came in at 3.5 billion euros ($3.98 billion), down nearly 10% from a year earlier and below the 4.3 billion euro consensus compiled by LSEG, according to CNBC. Shares fell 3% Friday morning and are down almost 30% year-to-date.

The Forecast Cut

Volkswagen now expects full-year 2026 sales revenue to range from flat to a 3% decline, reversing its prior guidance of flat-to-3% growth, according to Morningstar. Deliveries are projected to fall 3% to 7% for the year, compared with an earlier forecast of flat unit sales.

The culprit, per Morningstar: China's overall auto market slumped 20% in the first half of 2026, and Volkswagen's volumes there have cratered along with it. The company still expects an operating margin between 4% and 5.5% for the year, an improvement over the 2.8% it posted in 2025, but CFO Arno Antlitz called that 4% range "clearly a wake-up call" in comments to CNBC's Annette Weisbach.

Why the Company Says This Isn't Enough

Volkswagen spent 2025 and 2026 executing a cost-cutting plan built around a late-2024 union deal: 50,000 job cuts across the group in Germany by 2030, in exchange for no compulsory layoffs and no plant closures through the end of that year.

CEO Oliver Blume told staff in an internal memo, reported by both CNBC and Morningstar, that the company's costs in administration, infrastructure and support functions run 20% higher than comparable rivals. Closing that gap without touching pay, Blume wrote, would theoretically require cutting a further 50,000 jobs on top of what's already planned.

Antlitz reiterated the point Friday: "We must accelerate efforts to structurally lower our cost base and sustainably improve our earnings quality," he said, according to Morningstar. "What matters now is swift and consistent implementation."

Four German plants remain in limbo: Hanover, Zwickau, Emden, and the Audi facility in Neckarsulm. Blume has said he cannot guarantee their future. Livemint reported that the works council puts the stakes at up to 40,000 jobs tied to those threatened closures alone, on top of the 100,000 total figure now being discussed.

The Union Fight Ahead

Volkswagen's works council will hold staff assemblies with Blume in Wolfsburg on August 25 and at the Emden and Zwickau plants on August 26, according to a Reuters report cited by Livemint. Workers plan to press him directly on the job threat.

A Volkswagen spokesperson told Reuters there are currently no agreements in place and declined to confirm specific job-cut numbers. Nothing is finalized, and the 100,000 figure represents a risk scenario, not a signed deal.

Blume has also tried to walk back the plant-closure framing. He told Germany's Bild am Sonntag there are "smarter solutions" than shutting factories outright, according to Livemint. Antlitz echoed that Friday, telling CNBC he's "not looking for job cuts per se and I'm not looking for plant closures per se," and floated the idea of finding alternative uses for plant capacity, including a possible tie to defense industry production, though he offered no specifics.

Union leaders have separately criticized leaks to the press about the scale of cuts before workers were formally briefed, according to Livemint, adding friction to talks that were already tense.

If Volkswagen does cut 100,000 jobs, Livemint notes it would be the largest restructuring in global auto industry history, surpassing the roughly 50,000 jobs General Motors cut during its 2009 bankruptcy. Volkswagen isn't alone in the pain: BMW and Mercedes-Benz have both posted falling profits tied to the same forces, chiefly Chinese domestic rivals eating into market share at home and now exporting aggressively into Europe.

None of the four threatened German plants have closure dates. No final layoff number has been agreed with unions. What's confirmed is the August 25-26 meeting schedule, the widened 2026 sales and delivery forecast cuts, and a CFO on record saying the current plan, built around 50,000 cuts, isn't sufficient to close a 20% cost gap with competitors.