Volkswagen and Porsche Shares Drop After Automaker Slashes Profit Forecast

Shares in Volkswagen AG and its luxury sports car unit Porsche continued to fall in Monday trading, extending Friday's declines after the German automaker issued a significant profit warning.

Market Reaction

By 0713 GMT on Monday, shares in Volkswagen were down 2%, according to Reuters. Stock in the recently-listed Porsche AG brand fell 2.8%, while shares in Porsche SE, Volkswagen's largest shareholder, were 3.5% lower.

The drop follows a sell-off that began on Friday after Volkswagen announced a sharp downward revision to its financial outlook for the year.

Profit Outlook Slashed

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Volkswagen said on Friday it was cutting its profit margin forecast for 2026 to a maximum of 1%, a steep reduction from its previous guidance of 4% to 5.5%. The company attributed the downgrade to several factors, including:

• A €6 billion ($6.88 billion) goodwill impairment at its Porsche division.
• A sluggish market in China, a key region for the automaker.
• Higher provisions for employee retirements.

The impairment at the high-margin Porsche brand is a significant driver of the revised forecast, signaling challenges even for the group's most profitable units.