The Volkswagen Group filed its second quarter results on Friday, with profits continuing to dip for the struggling car giant. 

The company logged net profits of €1.54 billion (roughly $1.75 billion) in the second quarter, a 32.9% drop compared to €2.29 billion in the same quarter of 2025. 

Although the vagaries of the Trump administration’s tariff regime hardly help, most of the company’s woes can be traced back to China. 

Sales, particularly of high-value and high-margin models, in the world’s second-largest car market are stagnating as China’s economic growth slows. And VW is also struggling with intense Chinese competition both on the Chinese market, and increasingly in Europe as well, as Chinese carmakers look to tap new markets amid the domestic slowdown. 

Some in the company are calling for more drastic job cuts and factory closures. 

“In a situation where the overall market in China is shrinking by 20% and Chinese competitors are increasing their exports and therefore the competitive pressure in Europe, the currently planned initiatives do not suffice,” board member Arno Antlitz said. 

CEO Oliver Blume, meanwhile, said a savings program alone would not suffice. He said the priority should be making VW faster, more resilient, more competitive and more innovative. He said they needed to find a way to stay profitable if only selling 8 million vehicles a year, and said he wanted details to be finalized by the end of 2026.

“VW’s business model does indeed face pressure in many areas and needs optimization,” Blume said, albeit adding that it was also clear that, “a debate about factory closures and historically unprecedented personnel cuts is not the new business model for the VW Group, because that’s not a new source of revenue or profits, it brings no technological advantage, creates no competitive products and taps no new markets for our vehicles.”

Some initial measures, like reducing the range of products on offer, seeking to streamline production, should be complete this year, Blume said. Larger steps would take time, he added, saying it was unrealistic to expect full factory closures before 2030.

The Volkswagen Group comprises multiple major automakers in Germany and beyond, also including Audi, Porsche, Seat, Skoda, Lamborghini, Bentley and Ducati.