Volkswagen posts €5.8bn quarterly loss as Porsche writedown bites

Volkswagen recorded a net loss of €5.8 billion in the third quarter, driven by special charges totalling €7.8 billion, the German carmaker announced. The single largest item was a €6.4 billion writedown on the goodwill value of its Porsche subsidiary, reflecting lower expectations for the brand's future performance.

Group revenue fell 6.3 percent year-on-year to €75.3 billion in the quarter. Vehicle deliveries dropped to 1.89 million units between July and September, a decline of nearly 14.3 percent compared with the same period a year earlier.

China, the group's most important market, bore the sharpest pain. Volkswagen sold roughly 406,000 vehicles there in the quarter, down 38.5 percent. For the first nine months of the year, total deliveries across all brands reached around six million units, approximately 600,000 fewer than in the prior-year period.

Chief Financial Officer Arno Antlitz said the adjusted operating margin stood at 3.8 percent after nine months. "That is too little to continue investing powerfully in our future," he said.

Management had already cut the full-year profit guidance in mid-September. The group now expects an operating margin of at most one percent on revenue for the full year, against a previous target range of 4.0 to 5.5 percent.

Volkswagen is simultaneously negotiating a further restructuring with worker representatives on top of an existing programme targeting 50,000 job cuts by 2030. An additional 50,000 positions and four German plants remain at risk, the company said.