Volkswagen AG cut its 2026 profit forecast on Sept. 18, saying an impairment on the goodwill of its Porsche business, a worsening market in China and restructuring charges will push its operating return on sales down to no more than 1 percent this year.
In a regulatory ad hoc release published at 17:17 CET, the Wolfsburg-based group said it now expects an operating return on sales of "up to 1 percent" for fiscal 2026, against a previous guidance range of 4.0 to 5.5 percent and the 2.8 percent reported for 2025. The company noted that the average analyst expectation stood at 4.1 percent. Group sales revenue is now expected at around 315 billion euros — broadly the midpoint of the earlier range of minus 3 to zero percent — compared with 321.9 billion euros in 2025. Guidance for net cash flow in the automotive division was left at 3 billion to 6 billion euros, and net liquidity at 32 billion to 34 billion euros.
The largest single item is Porsche. Volkswagen holds 75.4 percent of the sports-car maker, and said it revised its medium- and long-term assumptions for determining enterprise value after Dr. Ing. h.c. F. Porsche AG informed it about the expected development of its key financial data, including the medium-term margin corridor of 10 to 15 percent Porsche had communicated. The resulting impairment test produced a non-cash impairment of around 6 billion euros on the goodwill allocated to the Porsche business segment, which will weigh on group operating profit in the third quarter.
Two smaller effects come on top. Volkswagen expects additional restructuring expenses from an expansion of early-retirement schemes and from the planned sale of Volkswagen Osnabrück GmbH, which it links to the "Future of Volkswagen" agreement reached at the end of 2024. It also expects non-cash impairments on the assets of fully consolidated companies in China, where the market has contracted. Together, the German group said those effects — restructuring, the Osnabrück disposal and the Chinese write-downs — should depress second-half results by around 2 billion euros, with the majority of the additional special items recognised in the third-quarter profit and loss account.
In total, Volkswagen expects special effects of around 10 billion euros to weigh on 2026 operating profit, of which 900 million euros had already been reported in the first half. Excluding those items, the operating return on sales for the full year would come in at about 4 percent — the figure that comes closest to showing how the core business is currently performing, rather than the accounting effect of revised long-term assumptions.
The market reaction was sharp. Volkswagen shares closed 5.6 percent lower, while Porsche AG fell 3.3 percent and Porsche SE, the listed holding that owns around 31.9 percent of Volkswagen, dropped 4.9 percent, according to Quartz. Bloomberg's account, published by Transport Topics, put the intraday decline at as much as 7.5 percent — the steepest in a year — and said the selling spilled over to BMW, Mercedes-Benz and Ford.
The writedown also travelled up the ownership chain. Porsche Automobil Holding SE said in its own ad hoc release, filed at 17:18 CET, that it now expects its adjusted group result after tax for 2026 to land between minus 0.5 billion euros and plus 1.5 billion euros, down from a previous range of 1.5 billion to 3.5 billion euros. The holding stressed that the 6 billion euro impairment at the Volkswagen level does not affect its own adjusted group result, because of adjustments already made in earlier years, and has no impact on its liquidity; it confirmed its forecast for group net debt of 4.7 billion to 5.2 billion euros at the end of 2026.
Why the guidance cut matters beyond one quarter. A margin ceiling of 1 percent would leave Volkswagen far below the profitability it earned as recently as 2025, when the operating return on sales was 2.8 percent. Most of the damage is accounting rather than cash: the 6 billion euro Porsche charge is explicitly non-cash, cash flow and liquidity guidance were untouched, and the adjusted margin of about 4 percent suggests the operating picture, while deteriorating, is not collapsing. What has changed is the value Volkswagen assigns to Porsche, whose capital markets day on Oct. 7 is now the next scheduled moment for updated medium-term targets, according to Bloomberg. The company has also been cutting capacity: earlier this month its supervisory board approved a restructuring package that could double planned job reductions to 100,000 positions globally, as reported by Quartz.
There are clear limits to what the release shows. Volkswagen said its forecast assumes the current tariff situation in international trade persists and that potential future effects of the escalation in the Middle East cannot yet be reliably estimated, which is why they are excluded. The projections also do not factor in possible impacts from the 2030 Group Target Picture or from the disposal of the majority shareholding in Everllence. The impairment itself reflects revised long-term planning assumptions — including Porsche's own medium-term corridor — rather than a realised loss, and the dividend proposal for the 2026 financial year will only be decided at the beginning of 2027 and put to the annual general meeting. The audited picture arrives with the interim report for the first nine months, due on Oct. 29, when the special items are expected to be booked in full.
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