The Volkswagen Group reported a mixed performance for the first quarter of 2025, balancing robust product momentum with financial challenges as it navigates an increasingly volatile global economic environment.
The Group’s sales revenue rose by 2.8% year-on-year to €77.6 billion, driven by increased vehicle sales in markets outside China and solid contributions from the Brand Group Core, Brand Group Progressive, and Financial Services. However, the operating result dropped significantly to €2.9 billion, down from €4.6 billion in Q1 2024, with the operating margin shrinking to 3.7%.
“This quarter reflects both our product strength and the ongoing pressures we face,” said Arno Antlitz, CFO & COO of the Volkswagen Group. “Order intake in Western Europe rose by 29%, and every fifth car sold there was fully electric, more than doubling unit sales of EVs. Yet, the rapid EV expansion also weighs on margins, emphasizing the need for sharper cost discipline.”
Volkswagen sold 2.1 million vehicles globally in Q1 2025 – a modest 0.9% increase year-over-year. Growth in Europe (+4%) and South America (+17%) helped offset a decline in China (-6%) and North America (-2%). Western Europe saw especially strong demand for new models like the VW ID.7 Tourer, CUPRA Terramar, Audi Q6 e-tron, and Porsche 911, pushing the order backlog past 1 million vehicles.
Despite the positive volume trends, the Group reported a negative net cash flow of €-0.8 billion in its Automotive Division, an improvement from €-2.5 billion in Q1 2024. This was impacted by €1.2 billion in outflows for M&A and restructuring activities.
Brand Group Highlights:
- Core Brand Group: Sales revenue up 8% to €35.3 billion, though the operating margin fell to 3.2% due to higher BEV share and special effects.
- Progressive Brands: Operating result rose slightly to €0.5 billion, with a margin of 3.5% (5.9% excluding special effects).
- Sport Luxury: Revenue dipped 4% as sales fell, particularly in China; operating profit dropped to €0.7 billion.
- TRATON Group: Revenue dropped 10% due to lower volumes at Scania, MAN, and International brands.
- CARIAD: Reported a loss of €0.8 billion despite 33% revenue growth from licensing income.
- Group Mobility: Financial services arm contributed €0.9 billion, up significantly from the previous year.
Volkswagen expects sales revenue to exceed 2024 levels by up to 5%, with an operating return on sales between 5.5% and 6.5%. However, projections lean toward the lower end due to geopolitical tensions, trade restrictions, and volatile commodity markets. Automotive net cash flow is anticipated to be between €2.0 and €5.0 billion, and net liquidity is forecasted to range from €34 to €37 billion.
As Volkswagen doubles down on electrification and cost efficiency, its ability to maintain profitability amid transformation will be a key storyline for the remainder of 2025.
