VW's Preferred Shares: A Family Ultimatum Meets a Widening Profit Warning
Published on 08/09/2026 at 12:31 | Redaktion boerse-global.de
The patience of Volkswagen's most powerful shareholder has run out. Porsche SE, the holding company through which the Porsche-Piëch family controls the Wolfsburg automaker, is demanding an accelerated overhaul of the group — including an end to what it calls "thinking prohibitions" around plant closures and headcount reductions. The message from the family's camp is unambiguous: the time for cautious decision-making has passed.
The pressure is being applied at the highest level. Porsche SE chief Hans Dieter Pötsch is pushing Volkswagen toward a rapid cost-cutting programme, according to Manager-Magazin, after the holding company posted a hefty first-half loss driven by writedowns on its VW stake. Porsche SE reported a 14.5 percent decline in first-half profit to EUR 949 million, alongside a net loss of EUR 2.2 billion — a stark reversal from the EUR 338 million profit recorded in the same period a year earlier. Pötsch has described the current situation as a critical, historic turning point for Volkswagen and is urging swift decisions.
A Restructuring Plan Stuck in Committee
The scale of what's on the table is considerable. As many as 100,000 jobs could go, with four German plants facing potential closure. CEO Oliver Blume's initial plan targets up to 50,000 job cuts — a deep incision into the domestic factory network of the core VW brand, which is already straining under margin pressure.
But the plan is currently stuck. Although the supervisory board gave its fundamental approval to management's savings and profitability programme in early July, it postponed the decisive resolutions on plant closures and specific job-reduction measures. In a vote on the restructuring proposal, worker representatives rejected management's plan by 12 votes to 7, leaving the initiative frozen for now.
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The company confirmed on July 24 that up to 100,000 positions could be eliminated, while the fate of four German plants remains unresolved. Media reports, including from Der Spiegel, suggest the Zwickau and Emden facilities could be affected from 2031, Hannover from 2032, and the Audi site in Neckarsulm from 2034. None of this has been officially confirmed — the supervisory board has merely postponed the relevant decisions. Volkswagen also intends to slash its model lineup by up to half by 2030.
Audi's Warning Adds to the Gloom
The crisis has now reached the group's second tier of management. On July 27, Audi — one of the most profitable brands in the VW portfolio — sharply lowered its 2026 revenue guidance from EUR 63-68 billion to EUR 58-63 billion. The luxury marque also trimmed its expected operating margin to 5-7 percent, down from the previously communicated 6-8 percent, according to Reuters.
The parent company had already delivered disappointing numbers three days earlier. Second-quarter group profit fell 32.9 percent year-on-year to EUR 1.54 billion, down from EUR 2.29 billion. For the first half, Volkswagen reported operating profit of EUR 3.6 billion — a 4.5 percent improvement — with an operating margin of 3.8 percent, or 4.3 percent adjusted for special items. Revenue for the half came in at EUR 158.1 billion, nearly flat against the EUR 158.4 billion recorded a year earlier. The group's operating result, however, dropped 11.6 percent to EUR 5.9 billion, with the operating margin slipping to 3.8 percent.
The numbers prompted management to revise its full-year revenue outlook downward. Instead of the previously targeted growth of 0-3 percent, Volkswagen now expects revenue to contract by between 3 percent and 0 percent. The group is holding firm on its margin target of 4.0-5.5 percent.
China Slump and Tariffs Bite
The operational backdrop explains the shareholders' impatience. US tariffs are costing the group around EUR 5 billion annually, while deliveries in China — Volkswagen's most important single market — collapsed by roughly a fifth in the first half. In the second quarter alone, Chinese deliveries fell 26 percent to 424,300 vehicles, even as Europe and South America posted gains. The group's US market share stands at about 4 percent, which has revived discussions about a pickup truck strategy in partnership with Ford.
There are, however, some encouraging signs. The order bank for battery-electric vehicles in Europe grew by 50 percent, with more than 70,000 orders collectively placed for the new ID. Polo, ID. Cross, CUPRA Raval and Škoda Epiq models. Electric vehicles now account for 31 percent of the total order book. Blume insists Volkswagen remains capable of acting and that the transformation is paying off — while conceding that costs remain too high. On Friday, the company unveiled the ID. ERA 5X, a new electric SUV, though details on range, power and pricing were not disclosed. Earlier this month, on August 5, pre-sales began for a new full-hybrid powertrain for the Golf and T-Roc, with the Golf Hybrid available in R-Line trim from EUR 41,400.
A Boardroom Shuffle in the Wings
Alongside the cost-cutting drive, a personnel reshuffle is taking shape at the top of the group. A member of Audi's management board is reportedly set to take over as head of North America for the group. Such a move could trigger a far-reaching domino effect across central positions throughout the Volkswagen group, according to Manager-Magazin — a sign of how deeply the restructuring pressure now reaches into the executive ranks.
In a separate development, Volkswagen is pressing ahead with its exit from the diesel engine business. At the end of June, Bain Capital acquired a 51 percent majority stake in the diesel division Everllence, in a transaction valued at around EUR 7.4 billion. Volkswagen retains 49 percent, with the deal expected to close by the end of 2026, subject to regulatory approvals.
Shares Stabilise, But the Damage Is Done
The market's reaction to the combination of reform pressure and weak half-year results has been mixed. On Friday, Volkswagen's preferred shares rose 1.51 percent to EUR 76.42. That leaves the stock about 10.43 percent above its 52-week low of EUR 69.20, set in early July. But the year-to-date picture remains deeply negative, with the shares down 26.63 percent since January. The stock sits nearly 30 percent below its 52-week high of EUR 109.10, reached in December.
Analyst sentiment is divided. One research house cut its price target from EUR 99 to EUR 90 on July 27 but maintained a Buy rating. The broader consensus in early August showed seven houses rating the stock Buy and five at Hold, with an average price target of EUR 111.42 — well above current trading levels.
The coming weeks will test whether Volkswagen can translate shareholder pressure into decisive action. The combination of Porsche SE's demands, a thin operating margin and the threat of plant closures is colliding with early signs of momentum in electrification. How quickly the group delivers on the required decisions may well determine whether the recent modest recovery in the share price has legs — or fades as quickly as it appeared.
