VW profits plunge and deep job cuts loom amid tough Chinese competition

A technician applies the finishing touches to a VW logo. Volkswagen employs more than 650,000 people across all its brands. Photograph: Matthias Rietschel/Reuters View image in fullscreen A technician applies the finishing touches to a VW logo. Volkswagen employs more than 650,000 people across all its brands. Photograph: Matthias Rietschel/Reuters VW profits plunge and deep job cuts loom amid tough Chinese competition Carmaker, which is pushing through cost-cutting programme, expects sales to fall by up to 3% this year Volkswagen has reported a steep fall in profits and cut its revenue forecast amid a sales slump in China , as the German carmaker pushes through a brutal cost-cutting programme that includes slashing up to 100,000 jobs. The world’s second-largest maker of vehicles said it expects sales to fall by up to 3% this year, a dramatic reversal on a previous forecast for a 3% increase on last year’s €321.9bn (£275.3bn), because of a sales slump in the highly competitive Chinese market. The sales slump will increase pressure on the company to cut costs. Earlier this month the carmaker’s supervisory board rejected the chief executive Oliver Blume’s plans to shut four factories in Germany, as the manufacturer confirmed it was raising the job cuts target to 100,000 , double the number already agreed by unions. Tesla stock suffers double-digit drop on carmaker’s worst day in years Read more Volkswagen’s operating profit fell by 9.5% to €3.5bn in the second quarter, below analysts’ estimates of a small increase to €3.9bn, as Blume battles with unions to push through a radical restructuring programme. On Friday the company said that the proposed additional job cuts would mostly be in administrative positions across its global business. The plans also include reducing Volkswagen’s model line by up to half. Volkswagen employs more than 650,000 people across all its brands, which include Audi, Bentley, Skoda, Seat, Porsche and Cupra, and has been hit hard by growing – and cheap – Chinese competition and the struggle to shift to electric cars. In the first half of this year, Volkswagen delivered 6.3% fewer cars globally, about 4.1m, mostly because of its travails in China. Volkswagen sales in China have fallen by more than 31% in the first of this year, against increases in Europe and North America. “The extent to which western carmakers are being squeezed out of the Chinese car market by domestic operators is laid bare by Volkswagen’s latest update,” said Russ Mould, the investment director at AJ Bell. skip past newsletter promotion after newsletter promotion Blume said on Friday that Chinese carmakers had sharply increased exports, which was adding pressure in Europe, adding that the restructuring programme was essential to make the company “more innovative, faster, more attractive and robust”. Volkswagen’s share price fell 1.5% after the release of its latest financial results and are down 66% over the past five years. “After nearly four years at