Volwagen’s Profit Plummets 44% as Leadership Warns of Existential Threat

Volkswagen Faces Deepening Crisis

According to Главком: Volkswagen’s leadership has acknowledged that the company’s troubles are far worse than previously thought. The automotive giant’s net profit for 2025 dropped 44% to €6.9 billion, down from €12.4 billion the year before. In an internal anonymous survey of board and supervisory board members, six out of nine top executives described the situation as an existential threat to the company, while the remaining three called it ‘tense.’ None of the leaders selected the ‘problem-free’ option.

Future Plans

In March 2026, Volkswagen Group announced plans to cut up to 50,000 jobs in Germany by 2030. One plant that may be repurposed is the Dresden facility, where production was halted in December 2025 for the first time in 88 years. CEO Oliver Blume stated that

‘the company must focus on producing models with better software and a lower price’

.

Volkswagen, the world’s second-largest automaker after Japan’s Toyota, is grappling with declining car demand and the need to adapt to shifting market conditions. In May 2026, the German Association of the Automotive Industry (VDA) warned that up to 225,000 jobs in the sector could be cut by 2035, highlighting a broader trend of workforce reductions across the automotive industry.

The situation at Volkswagen mirrors wider challenges facing the automotive sector in Germany and globally, including evolving consumer preferences, intensifying competition from electric vehicle manufacturers, and the push toward new technologies. With job cuts on the table, the company is striving to streamline costs and boost profitability-moves that could have long-term implications for the industry’s labor market. Moreover, this underscores the growing need for more agile business models in response to rapid shifts in demand and technology.

The challenges faced by Volkswagen are not unique in the automotive industry. As noted in a recent report, the iconic Russian automaker Lada has declared bankruptcy in Germany, highlighting the broader struggles within the sector. This trend emphasizes the urgent need for established manufacturers to adapt quickly to changing market dynamics to avoid similar fates.