Part of its problem is Porsche. VW Group has owned the Suttgart-based sports car maker since 2008, after turning upside-down a failed bid by Porsche to take over VW Group. And for a long time, Porsche generated significant profits for its owner. But sales in China have slowed, and like many other OEMs, it bet too heavily too soon on the electric vehicle transition; Porsche’s EVs are very competent, but it builds too many and sells too few. As a result, its profit margin fell below that of Skoda.

That’s partly why VW Group had to write down $11.5 billion (€10 billion) on Friday, $6.9 billion (€6 billion) of which was as a result of its 75 percent stake in Porsche.

Faced with the likelihood of a terrible 2026, VW may speed up its plan to shrink its workforce. “I had hoped that the measures agreed in 2024 would already be sufficient. Unfortunately, that has not been the case. We have absolutely no time to lose and will therefore significantly step up our performance program,” VW brand head Thomas Schaefer told a staff meeting.

And VW Group isn’t the only one. Today, Mercedes-Benz became the latest OEM to warn workers that it might have to close “one German assembly plant and one German powertrain plant” unless it can save costs.

Workers were out in protest yesterday at Audi, BMW, Mercedes-Benz, Porsche, VW, and their suppliers. “We expect corporate leaders and management teams to take responsibility for Germany as an automotive nation, for employees and for jobs,” said Christiane Benner, head of the IG Metall union, which was leading the protests.