German auto giant Volkswagen posts 37% drop in first-quarter profit

German auto giant Volkswagen on Wednesday reported a substantial drop in first-quarter profit as the carmaker navigates the disruptive impact of U.S. tariffs on the global car industry.

Europe’s biggest carmaker reported operating profit of 2.9 billion euros ($3.3 billion) for the first three months of the year, down 37% from the same period last year.

Volkswagen reported first-quarter sales revenue of 77.6 billion euros, up 2.8% from the first quarter of 2024. The company cited higher vehicle sales in markets outside China as underpinning the increase.

Earlier this month, Volkswagen warned that first-quarter operating profit would likely come in at 2.8 billion euros, citing special effects in the magnitude of 1.1 billion euros.

In an ad hoc statement on April 9, the company recognized that the preliminary first-quarter result deviated significantly from analyst expectations of around 4 billion euros.

“As expected, the Volkswagen Group experienced a mixed start to the fiscal year,” Arno Antlitz, chief financial officer and chief operating officer at Volkswagen Group, said in a statement.

“Given the current volatile global economic situation, it is even more important to focus on the levers within our control. This means complementing our great product range with a competitive cost base – so we can ensure to succeed also in rapidly changing global markets,” Antlitz said.

Volkswagen posted operating profit of 4.59 billion euros for the first quarter of 2024 and 6.15 billion euros for the final three months of 2024.

The results come as carmakers face uncertainty regarding U.S. President Donald Trump’s ongoing auto tariffs.

The sector is known to be acutely vulnerable to Trump’s back-and-forth trade policy, particularly given the high globalization of supply chains and the heavy reliance on manufacturing operations across North America.

Shares of Volkswagen are up nearly 10% year-to-date.

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