Volkswagen AG's decision to cut profit guidance amid waning demand underscores the challenges faced by German automakers, highlighting their struggle against rising competition and a declining market.
With VW cutting its guidance for a second time this year, the company pointed to an operating margin decline from 7% to 5.6%, emphasizing the impact of falling demand and necessary plant closures.
Oliver Blume, CEO of Volkswagen, faces increasing challenges as costs escalate and competition from Chinese EV manufacturers rises, particularly as the company re-evaluates its historic job security promises.
Analyst Giacomo Reghelin remarked that VW's latest setback strengthens its case for addressing overcapacity in Germany, indicating a potential shift in the automotive industry's labor landscape.
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