Volkswagen AG (VWAGY.PK) has issued a warning regarding the potential closure of Audi's Brussels plant, attributing the decision to a notable downturn in the demand for luxury electric vehicles. The German automotive giant has also revised its full-year 2024 operating return on sales outlook downward.
The company disclosed that costs related to either repurposing or closing the Brussels facility, combined with other unforeseen expenses, could total up to €2.6 billion for the 2024 fiscal year. This sum includes provisions of €0.9 billion recognized in April for termination agreements, which form part of Volkswagen AG's strategy for a sustainable reduction in administrative personnel costs.
Volkswagen now anticipates an operating return on sales in the range of 6.5% to 7.0% for the full year 2024, a decrease from the previous estimate of 7.0% to 7.5%. Given Porsche Automobil Holding SE’s approximate 31.9% equity investment in Volkswagen, this adjustment significantly impacts the group's post-tax results, as the at-equity results attributed to Porsche SE affect the overall post-tax outcomes for the Volkswagen group.
Consequently, Porsche has revised its earnings forecast. For fiscal year 2024, the group now expects a post-tax result ranging from €3.5 billion to €5.5 billion, compared to the earlier forecast of €3.8 billion to €5.8 billion.
Volkswagen is scheduled to release its half-year financial report on August 1.
