From CNBC · Jenni Reid · · 1m 20s
Volkswagen crashes out of Europe's top index
The German carmaker slashes profit forecasts and loses its place in the Euro Stoxx 50 as the auto sector struggles.
In brief
The German carmaker slashes profit forecasts and loses its place in the Euro Stoxx 50 as the auto sector struggles. Volkswagen cut its profit forecast to one percent from four to five point five percent and was ejected from Europe's blue-chip index, replaced by Nokia. Originally reported by CNBC.
Volkswagen slashes profit forecast
The German carmaker cut its expected operating return on sales to one percent, down from four to five point five percent.
Porsche impairment and China slowdown cited
Volkswagen blamed an impairment on its Porsche holding, deteriorating market conditions in China, and restructuring costs for the downgrade.
EV transition hitting key brands hard
The company said demand shifting to battery-electric vehicles will cause the Audi and Volkswagen Passenger Cars brands to fall short of expectations.
“An accelerated shift in demand in favor of battery-electric vehicles ... will lead to developments falling short of original expectations, especially for the Audi and Volkswagen Passenger Cars brands.”
Stock down twenty-seven point five percent this year
Volkswagen shares fell zero point five percent on Monday and have dropped twenty-seven point five percent since the start of the year.
Ejected from Euro Stoxx 50 index
Volkswagen was removed from Europe's blue-chip index on Monday, replaced by Finland's Nokia as it benefits from AI-related growth.
Restructure approved despite market turmoil
Volkswagen approved a major restructure cutting one hundred thousand jobs as it grapples with Chinese competitors, tariffs, and the EV transition.
The takeaway
Volkswagen cut its profit forecast to one percent from four to five point five percent and was ejected from Europe's blue-chip index, replaced by Nokia.
