Volkswagen is unlikely to see a profit rebound despite embarking on a historic restructuring programme as Europe’s largest carmaker faces an “existential threat” from Chinese competition, higher tariff and energy costs.
As the German carmaker prepares for Tuesday’s annual investor conference, analysts have called for more visibility on how its plants in Germany are improving productivity to compete with Chinese rivals who are rapidly expanding sales in Europe with affordable electric vehicles and plug-in hybrids.
“It’s an existential threat. You’ve got two choices. Produce a [vehicle] that you can price at a premium to everybody else or be cost competitive,” said Michael Tyndall, senior global autos analyst at HSBC, who last week cut its estimate for VW’s 2026 operating profit by 14 per cent.