Volkswagen has warned of one-off expenses of €10bn, or about $11.5bn. Most of the write-downs are linked to problems at Porsche, falling demand in China and intensifying competition from local carmakers. This was reported by Qazaqyia.kz citing Kursiv Media.

About €6bn of the write-downs are related to a revision of Porsche's medium-term forecasts; Volkswagen owns 75% of the sports car maker.

The sports car manufacturer has faced several problems at once: US tariffs, falling demand for foreign premium cars in China and low profitability. At the end of last year, that figure was only 1.1%.

Amid worsening sales, Porsche has already begun cutting its dealer network in China.

One of the main threats to Volkswagen has been the rapid development of Chinese carmakers. They are winning market share not only inside China but are also actively expanding their presence in Europe.

Chinese companies offer more affordable electric vehicles and bring new models to market faster. As a result, Volkswagen has to simultaneously cut prices, accelerate EV development and revise production volumes.

In 2024, the German group lost its status as the largest carmaker in China. The company now plans to cut production in the world's largest car market by about 20%.

"We have no time to lose," Volkswagen CFO Arno Antlitz said in an internal memo seen by Reuters.

Among the main threats, he named the advance of Asian competitors into the European market and rising sales of less profitable electric vehicles.

"There are no signs of consolidation. We will not be able to avoid this trend," Antlitz added, commenting on the situation in China.

The group now expects its operating margin for 2026 to be no higher than 1%. Volkswagen had previously forecast the figure in a range of 4% to 5.5%. Analysts on average expected 4.1%.

The company warned of a further deterioration in the market situation, especially in China, as well as an accelerated shift by buyers to electric vehicles. Because of this, Volkswagen lowered its forecasts for passenger cars of the Audi and Volkswagen brands.

The warning came two weeks after Volkswagen agreed a major transformation plan with shareholders.

It provides for cutting another 50,000 jobs, simplifying the group's structure and the possible closure of plants. This will be the largest restructuring in Volkswagen's history.

After the new forecast was published, Volkswagen shares fell 5.6%, Porsche — 3.3%, and the group's largest shareholder Porsche SE — 4.9%.