Volkswagen's 2025 profits plummet 44% as restructuring looms for German plants
Volkswagen Group has reported a sharp decline in after-tax profits for 2025, dropping by 44% to €6.9 billion. Despite this, the company's Group Mobility division saw a 15% rise in operating profit, reaching €3.45 billion. The news comes as McKinsey's latest analysis suggests major restructuring could be on the horizon for VW's German production sites.
The 2025 fiscal year brought mixed results for Volkswagen. While overall after-tax profits fell to €6.9 billion, the Group Mobility division—responsible for finance and mobility services—performed strongly. It recorded an operating profit of €3.45 billion, up 15% from the previous year. This division now handles nearly 70% of all VW vehicles delivered in Germany, with electric models making up 82% of that total.
Meanwhile, the company's stock price dipped slightly, closing at €88.92 on XETRA, a 0.65% decline. Analysts note that the stock remains near a critical support level, with a potential breakdown risking further sell-offs. Yet, some investors see value in the current price, citing a low price-to-earnings ratio and a solid dividend yield. A recent McKinsey report added pressure by outlining an extreme scenario for VW's future. Under this model, only two of the company's ten German plants—Wolfsburg and Audi's Ingolstadt facility—would remain operational long-term. The other eight could face closure, with production potentially shifting to locations outside Germany. Anthony Bandmann, the new head of Group Mobility, remains optimistic, forecasting another significant rise in operating profit for 2026.
Volkswagen now faces a period of financial contrasts and strategic challenges. The Group Mobility division's growth contrasts with the broader profit decline, while McKinsey's warnings highlight potential plant closures. Investors will be watching closely to see how the company balances cost-cutting measures with its ambitious profit targets for 2026.
