Volkswagen Slashes Outlook a Second Time as Challenges Mount
- Automaker cuts expectations for annual operating margin
- All three major German carmakers issued warnings this month
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Volkswagen AG cut its guidance for a second time this year, warning that waning demand will undercut the German carmaker’s profitability as it squares off with unions over possible job cuts and unprecedented plant closures.
The manufacturer said Friday that it now sees an operating margin of 5.6%. That’s down from a prediction of as much as 7% in July, when VW previously lowered its expectations, partly due to expected costs from closing an Audi plant in Belgium. Net cash flow in the automotive division is now expected to be less than half the level the company had foreseen.