STUTTGART, Germany (Reuters) -Volkswagen said on Wednesday it expects annual operative profit at the bottom end of its forecast, the latest carmaker to dampen its outlook as an industry already pressured by costs and competition grapples with tariff uncertainty.
The carmaker, which suffered a 40% drop in earnings in the first quarter, now sees annual operating profit closer to 5.5%, with net cash flow also on the lower end of its forecast of 2 billion to 5 billion euros and net liquidity close to 34 billion euros ($38.7 billion).
Battery-electric car sales, which more than doubled in Europe in the first quarter, also weighed on margins, Volkswagen said, in a sign of the difficulties faced by legacy carmakers to yield the same profits on battery-electric vehicle production they have long enjoyed for combustion engine cars.
“We need to ensure a competitive cost structure alongside our strong offering of vehicles to stay successful in a rapidly changing world,” Chief Financial Officer Arno Antlitz said in a statement.
The gloomy forecast follows Porsche cutting its outlook on Tuesday after margins plunged in the first quarter.
Mercedes-Benz on Wednesday pulled its guidance for the year altogether, stating that the current volatility of tariff policies was too high to make a reliable forecast beyond the fact that a persistent trade war would negatively impact margins.
($1 = 0.8790 euros)
(Reporting by Victoria Waldersee, editing by Thomas Seythal)
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