Volkswagen reported a 14.3% decline in first-quarter operating profit to 2.5 billion euros, as the company grapples with higher U.S. tariffs and growing competition from Chinese automakers.
The results highlight the challenges facing major European original equipment manufacturers (OEMs) in a rapidly shifting global automotive landscape.
The drop in profitability comes amid a broader industry struggle to adapt to post-pandemic demand fluctuations and geopolitical trade tensions.
Analysts have pointed to the increasing presence of Chinese electric vehicle (EV) brands in global markets as a key factor pressuring European automakers like Volkswagen.
The company has also been affected by the U.S. government’s imposition of higher tariffs on imported vehicles, which has raised production and import costs.
The automotive sector is under pressure from multiple fronts, including supply chain disruptions, shifting consumer preferences toward EVs, and regulatory changes.