Volkswagen Stock: Mixed Fortunes Across Business Divisions

Volkswagen's stock showed resilience on Tuesday, rising 1.6% to €110.05 on the XETRA exchange despite significant challenges in its subsidiary operations. The automotive giant faces contrasting trajectories within its business units, with Audi experiencing substantial profit declines while the commercial vehicles division demonstrates improved outlook. At Audi, after-tax profits plummeted by 33% to €4.2 billion last year, marking a second consecutive significant decrease. In response, the luxury carmaker has announced plans to reduce its workforce by up to 7,500 positions in Germany by 2029, though without compulsory redundancies. Employee profit-sharing has already been affected, with skilled workers receiving €5,310 compared to €8,840 in the previous year. These measures form part of Audi's strategy to achieve annual savings of at least €1 billion.

Commercial Vehicles Division Raises Targets

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In contrast to Audi's difficulties, Volkswagen's commercial vehicles unit presents a more optimistic picture, raising its return on sales target from 6% to 6.5% by 2029. This places the division on par with the passenger car segment, which maintains the same profitability goal. The commercial vehicles operation aims to reduce costs by €1.4 billion annually-€300 million more than initially planned-and decrease factory expenses by 40% by 2030. No additional job cuts beyond those previously announced are anticipated. The division's electric ID. Buzz model forms a central part of its growth strategy, with expansion planned beyond Europe and the recent US launch to include Australia, New Zealand, Japan, Indonesia, and Israel.