Volkswagen's China Joint Ventures Slip Below Break-Even as Wolfsburg Plots 300,000-Vehicle Export Push
Published on 10/29/2026 at 22:40 | Editorial boerse-global.de
Volkswagen's Chinese joint ventures have stopped making money at the operating level. Over the first nine months of the year, the proportionate operating result from those holdings came in at minus EUR 113 million, and the group is now guiding for 2026 pre-write-down earnings in China to hover around break-even only.
The swing is sharp. A year earlier, the same nine-month window produced an operating result of EUR 5.408 billion. That figure has since collapsed to EUR 71 million, dragged down by one-off items totaling EUR 8.7 billion. Impairments on the China business alone accounted for roughly EUR 1 billion, while the single largest charge was a EUR 6.4 billion goodwill write-down at Porsche.
Strip out the special items and the picture looks very different: operating profit before those effects reached EUR 8.8 billion, and net cash flow in the automotive division came in at EUR 4.4 billion.
Exports From China as a Way Out
Rather than retreat, the group wants to turn its Chinese footprint into an export base. Volkswagen plans to ship at least 300,000 vehicles built in China each year by 2030, according to Reuters, using both locally developed technology and locally assembled cars to serve overseas markets. The minimum volume is a target for annual exports by the end of the decade.
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The strategy cuts both ways — deploying Chinese-developed engineering outside the country and selling finished vehicles abroad. It marks a notable shift for a manufacturer that has long treated China primarily as a sales destination.
Guidance Held, Margin Still Thin
Volkswagen reaffirmed its 2026 outlook, expecting revenue of around EUR 315 billion and an operating return on sales of up to 1%. The profit forecast had already been trimmed in mid-September, according to dpa-AFX.
On the product side, finance chief Arno Antlitz said the company expects to earn as much from electric vehicles as from combustion-engine cars by roughly 2030. A strategic semiconductor partnership with NXP Semiconductors, agreed on Monday, will underpin the group's planned software-defined vehicle architecture, with the first model built on it scheduled for 2027.
12,000 More Jobs Go in Germany
Closer to home, Volkswagen said on 23 October that it intends to cut a further 12,000 positions at Volkswagen AG on socially acceptable terms, with a timeframe running to 2030. The announcement followed talks with employee representatives.
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IG Metall responded the same day with a strike threat from January, conditional on Volkswagen failing to withdraw its termination of collective agreements by the end of October. Formal negotiations are set to open on 24 November in Emden and continue on 15 December in Zwickau.
There was at least one piece of positive industrial news from Saxony. The Zwickau plant has commissioned a recycling facility for vehicle components, with 100 staff retrained for the work. From 2027, the site is slated to dismantle 4,100 vehicles a year.
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