August 3, 2026
Volkswagen scrapped its 2026 revenue growth forecast on July 24 and now expects group revenue to fall by as much as 3%, reversing a guide that had called for growth of up to 3%. Second-quarter operating profit came in at 3.5 billion euros, down about 9.5% year over year. The company confirmed it is working toward as many as 100,000 job cuts, double the figure it had previously acknowledged, with the futures of four German sites unresolved.
Audi cut its full-year revenue guide three days later, from at least 63 billion euros to at least 58 billion, an 8% reduction, and took roughly a point off the bottom of its operating margin range to 5% to 7%. The Neckarsulm night shift will be eliminated once A8 output ends at a plant already running well below its historical volume. CFO Juergen Rittersberger said publicly that Audi needs a comprehensive restructuring worked out with the group, which is a sentence a margin engine does not normally have to say about itself.
Porsche confirmed another 5,000 positions on July 27 on top of roughly 4,400 already announced, taking the total toward 9,000 by 2035, close to one in five of its workforce. The reductions are voluntary, through attrition, partial retirement and severance, with no compulsory redundancies. In the same announcement Porsche committed 2.1 billion euros to Zuffenhausen and Weissach and extended its German location guarantees to 2035. It confirmed full-year guidance on July 29, the only one of the five not to cut something.
BMW opened the largest voluntary redundancy program in its history on July 29, targeting about 8,000 positions by the end of 2027 out of roughly 154,500 globally. Offers go to around 40,000 of its 85,000 permanent German employees starting in October. Administration and the research and development organization carry the reductions and production is explicitly excluded. Expected saving is about 1 billion euros a year from 2028, against a program cost in the hundreds of millions.
What the Cuts Are Buying
Mercedes reported the week fifth, and its numbers show what the other four are buying. Group adjusted EBIT rose 22% to 2.3 billion euros on revenue of 32.06 billion, down 3%. Cars adjusted return on sales was 4.0%, inside guidance but down from 5.1% a year earlier, and reported Cars EBIT fell to 49 million euros from 783 million after 704 million euros of non-cash impairments on Chinese equity investments. China deliveries fell 30% to 98,600 units. A 22% earnings increase on a 3% revenue decline is arithmetic performed on the cost base.
Five programs, one rule: the cuts land on the people who plan and design vehicles, and the assembly lines are ring-fenced. That is a rational way to defend a reported margin in the quarter it is reported. It also reduces the capacity that produces the model cycle arriving in 2029 through 2031, because product planning, powertrain engineering and software development are the functions being thinned. Nothing here requires assuming anyone intends that outcome. It is what the org charts will look like in eighteen months.
The Order Book Is Not the Problem
BMW is the case that makes the point cleanly, because its order book is not the problem. Group deliveries rose 2.1% in the first half and MINI rose 20.4%, and the iX3 reached 50,000 units within nine months of launch. The knife came out after the second profit warning in a month cut automotive EBIT margin guidance to 1% to 3%. The volume held and the margin guide did not, so the cost base is where management went.
China is the shared cause and the shared consequence. Mercedes lost 30% of its Chinese deliveries in a quarter. Volkswagen named Chinese-brand competition among the forces squeezing its business. Chinese brands took 28.3% of the European plug-in hybrid market in the first half and the BYD Seal U displaced the VW Tiguan from the top of that segment, which is why VW CEO Oliver Blume has publicly asked the EU to extend its battery-electric tariff framework to plug-in hybrids. The same capacity is taking share at both ends of the trip.
Porsche is putting 2.1 billion euros into two German sites while cutting a fifth of its people, and none of the five announced any reduction in the number of vehicles they intend to build. That is the pattern in its purest form: concentrate the capital, thin the payroll, hold the footprint. Investment and headcount are moving in opposite directions at the high-margin end of the market, and that only reconciles if output per remaining employee is expected to rise sharply.
Two Clocks That Do Not Match
Product cycles run five to seven years and cost programs book their savings in two. BMW expects its billion euros from 2028, Porsche runs its program to 2035, and Audi is negotiating a restructuring whose plant questions reach into the 2030s. Every one of those horizons is longer than the guidance year the cuts were announced to protect. European volume in 2029 will be built by the organizations these five companies are shaping this month, and the shape they chose puts the metal first.
