Volkswagen Group earnings declined in the second quarter as the company's bottom line came under pressure from one-off restructuring charges and lower returns on China deliveries.

Volkswagen Group Q2 2024 earnings before interest and taxes (EBIT) came in at €5.46 billion, 2.4% down on last year’s level.

In particular, its Porsche brand struggled with supply chain issues in H1 and low sales in China.

Its decrease in operating profit result in H1 2024 (€10.1 million down from €11.3 billion) is related to several exceptional factors, including the severance program at Volkswagen AG.

Its operating margin was further impacted by higher fixed costs, charges related to its deconsolidation of VW Bank Russia and the close of part of a gas turbine business at MAN Energy Solutions.

Operating return on sales for H1 2024 was 6.3% (6.6% in Q2).

Volkswagen CEO Oliver Blume said: “We are accelerating our global software strategy with international partners and have completely realigned our set-up in China.”

He added that: “However, much of the work still lies ahead of us.”

In a statement, CFO Arno Antlitz said that a return of 6.3% is “too low”.

"We will have to make significant cost-cutting efforts in the second half of the year and beyond in order to achieve our goals."

He added: “We must make significant efforts on the cost side in the second half and beyond in order to achieve our targets.”