FRANKFURT (Reuters) -Volkswagen on Friday cut its annual outlook for the second time in less than three months, citing the weaker-than-expected performance of its passenger car division as well as a deteriorating macroeconomic environment.
The outlook cut is the latest by Germany’s automaker heavyweights, which are coming under growing pressure from weakening demand in China. Mercedes-Benz and BMW also both downgraded their annual forecasts earlier this month.
Volkswagen, Europe’s largest carmaker, now expects a profit margin of around 5.6% in 2024, down from 6.5-7% previously and below the 6.5% LSEG estimate.
Sales are expected to fall by 0.7% to 320 billion euros ($356.7 billion) whereas the company had initially expected an increase of up to 5%.
Volkswagen said it was cutting its outlook “in light of a challenging market environment and developments that have fallen short of original expectations, particularly at the brands Volkswagen Passenger Cars, Volkswagen Commercial Vehicles and Tech. Components”.
($1 = 0.8971 euros)
(Reporting by Christoph Steitz, editing by Thomas Escritt, Kirsten Donovan)
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