Volkswagen Warns Of Possible Closure Of Audi's Brussels Facility; Cuts FY Operating Return Outlook

(RTTNews) - Volkswagen AG (VWAGY.PK) warned that it might shutter Audi's Brussels facility, citing a significant decline in demand for luxury electric vehicles. The German automaker cut its operating return on sales outlook for the full year 2024.

Volkswagen stated that the costs associated with either repurposing or closing the Brussels plant, along with other unforeseen expenses, would total up to 2.6 billion euros in the 2024 financial year. This figure includes provisions of 0.9 billion euros recognized in April for termination agreements, which are part of the sustainable reduction in administrative personnel costs at Volkswagen AG.

Volkswagen expects an operating return on sales to be in the range of 6.5% to 7.0% for the full year 2024, compared to the prior outlook of 7.0% to 7.5%. Because Porsche Automobil Holding SE holds an equity investment of approximately 31.9% in Volkswagen, the group's post-tax results are notably affected by the at-equity results assigned to Porsche SE, thereby impacting the overall post-tax results of the Volkswagen group.

As a result, Porsche adjusted its earnings forecast accordingly. For the financial year 2024, the group result after tax of Porsche is now to be expected in a range of 3.5 billion euros to 5.5 billion euros. Previously, the forecast for the group result after tax was between 3.8 billion euros and 5.8 billion euros.

Volkswagen will publish its half-year financial report on August 1.