Volkswagen's stock price declined by 0.5% on Monday, following an 8.3% drop on Friday, as the company revised its expected operating return on sales down to 1% from a previous forecast of 4% to 5.5%. This adjustment was attributed to an impairment related to its stake in Porsche, worsening market conditions—especially in China—and restructuring costs.
The company noted that the shift towards battery-electric vehicles is leading to disappointing developments for its Audi and Volkswagen Passenger Cars brands. Additionally, Volkswagen's removal from the Euro Stoxx 50 index reflects broader struggles within the European automotive sector, which has faced rising costs and increased competition.
Despite a significant drop of 27.5% in share price this year, Deutsche Bank analysts suggest that the profit warning may exaggerate the underlying business's deterioration, as they estimate that underlying margins remain around 4% and cash generation is stable.
Volkswagen's exit from the index, replaced by Nokia, underscores the ongoing challenges in adapting to rapid changes in consumer demand for electric and hybrid vehicles