Stable figures, big task: VW volume brands fight for returns

The Volkswagen Group's core brands achieved a largely stable result in 2025 despite difficult conditions. The Core Brand Group, which includes Volkswagen Passenger Cars, Škoda, Seat/Cupra and Volkswagen Commercial Vehicles, achieved an operating profit of €6.8 billion, almost on a par with the previous year. A look behind the seemingly solid figures shows the extent to which external factors weighed on the business. Restructuring costs, the after-effects of the diesel crisis and new US import tariffs weighed on the result. Without these special effects, the operating profit would have been 8.2 billion euros. Despite slight sales growth, profitability therefore remains a key challenge.

Growth in sales and turnover

The brand group sold a total of 5.12 million vehicles in 2025 - an increase of 3.3% compared to the previous year. Europe in particular once again proved to be a stable sales market. The Group was also able to secure market share in the battery-electric vehicle segment.

Sales grew by 3.7 percent to 145.2 billion euros. New models and a more favorable product mix helped to increase revenue per vehicle. Nevertheless, the operating return on sales fell slightly from 5.0 to 4.7 percent. Even adjusted for special effects, at 5.6 percent it was still well below the level of many competitors.

Efficiency programs show effect

The brand group has been working on improving its cost structure for several years. In 2025, overhead and factory costs in particular were reduced and development processes were organized more efficiently. The development cost ratio remained below the strategic target of four percent. Standardization of platforms and reduced complexity should bring additional savings in the future.

The increased net cash flow of 6.95 billion euros indicates that the measures are already having an impact, at least in terms of capital efficiency.

New structure to shorten decision-making paths

An important component of the strategy is the organizational restructuring of the brand group. Since the beginning of 2026, Brand Group Core has been managed using a more centralized management model. The aim is to coordinate development, production and procurement more closely across brands. This is intended to avoid duplication of work and make more efficient use of investments. In the production area alone, the Group sees potential savings of around one billion euros by 2030.

Electric models for the volume segment

The affordable electric car segment will be strategically decisive for Volkswagen in the coming years. With the so-called Electric Urban Car Family, the brand group is planning several compact electric models from 2026. The announced Volkswagen ID. Polo is set to close an important gap in the market with an entry-level price of around 25,000 euros. Other models such as the Cupra Raval and the Škoda Epiq are intended to appeal to additional buyer groups.

Volkswagen expects the joint platform to generate economies of scale, which should result in savings of around 650 million euros over its lifetime. At the same time, the project could help to improve the previously low margins of many electric vehicles.

Different development of the brands

Škoda remains the most profitable player in the volume segment. The Czech brand achieved a return on sales of 8.3 percent and increased its operating profit to 2.5 billion euros.

Although Seat/Cupra recorded record sales, it was hardly able to generate any profit. One-off effects, high product costs and EU tariffs on the Cupra Tavascan produced in China had a significant negative impact on the result.

Volkswagen Commercial Vehicles is also feeling the pressure in the market. Although sales grew to 428,000 vehicles, the operating result remained comparatively low at 245 million euros.

2026 will be the decisive year

2026 will be a key year for Volkswagen. The Volkswagen brand itself is launching the biggest model offensive in its history with the "Volkswagen Boost 2030" strategy. In addition to new electric vehicles, the focus will also be on efficiency programmes and organizational changes.

The coming years will show whether the measures are sufficient to sustainably increase profitability. One thing is clear, however: despite stable results, the Brand Group Core remains under considerable pressure to transform. (aum)