Volkswagen plans to reduce its projection.
It seems Volkswagen is dealing with another setback. Initially, the car manufacturer aimed to surpass its 2022 sales by up to 5%. However, things have taken a turn for the worse, and they're now projecting sales to be less than they were in 2023.
The company has revised its revenue forecast twice in recent months, citing tough market conditions and poor performance in key areas like its core brand, commercial vehicles, and components. As a result, Volkswagen expects its revenue to be around 320 billion euros, which is almost at par with last year's figure.
The predicted margin has also taken a hit, with Volkswagen estimating it to be 5.6%, significantly lower than the initial forecast of 6.5% to 7.0%. The expected car sales are also down, with the company anticipating sales of approximately nine million cars, which is less than what they sold in 2023.
Additionally, Volkswagen's financial division might be impacted negatively due to its separation from its Russian business and underperformance in operations outside of Europe.
The automaker's recent decision to dissolve its long-term employment protection agreement with German unions has caused quite a stir. This move could potentially lead to plant closures and job cuts, prompting strong opposition from the works council and IG Metall. At present, wage negotiations between Volkswagen and IG Metall are ongoing.
Manufacturers worldwide are closely watching Volkswagen's situation, as its struggles could impact industry trends. Due to its challenges, several manufacturers' Manufacturers have revised their sales projections, cautiously avoiding overambitious targets.
