Investing.com -- Volkswagen AG VZO O.N. (ETR:VOWG_p) slashed its sales and profitability forecasts for the year as softer vehicle demand and sluggish global economic growth put the brakes on performance.
The company said it now expects sales to be around €320 billion, down from €322.3B last year, with deliveries forecast around 9M vehicles, down from 9.24M vehicles last year. The company previously forecast an increase of up to 5% in sales and 3% in deliveries.
The company attributed the weaker sales outlook to soft demand for its core Volkswagen Passenger Cars, brand Volkswagen Commercial Vehicles and Tech. Components, which have fallen short of original expectations, and a deterioration in the macroeconomic environment, were also hurting demand, the company added.
Operating return on sales, a key gauge of profitability, is now expected to come in at about 5.6% this year, below the previous guidance range of 6.5% to 7%.
Volkswagen also cut itws net cash flow forecast of its automotive division to to around €2B, compared with a prior forecast for €2.5B to €4.5B.
The company is set to report its interim results as of September 30, 2024 on Oct. 30.