Volkswagen Reports Decline in Q1 Profits, Plans to Retain Osnabrück Plant

Volkswagen (VW) continues to face financial challenges as it reported a significant decline in profits for the first quarter of 2025. The company's earnings plummeted by nearly 41% compared to the previous year, amounting to EUR2.19 billion. A notable factor contributing to this decrease was the reduced income from its operations in China, alongside losses in its battery division.

Despite these financial setbacks, VW experienced a slight increase in overall revenues, which rose by approximately 3% to EUR77.6 billion. The operational results were impacted by costly special charges, including CO2 reserves in Europe, restructuring costs related to its software division Cariad, and provisions for penalties linked to the emissions scandal, cumulatively exceeding EUR1.1 billion. Consequently, the operational profit fell by around 37%, settling at EUR2.9 billion.

Looking ahead, VW has committed to maintaining its Osnabrück plant despite the ongoing challenges. Reports had suggested that production of corporate vehicles at the facility would cease in autumn 2027 due to low utilization rates stemming from weak sales. However, VW officials have clarified that no such decision has been finalized, and various options for the plant's future are still being considered. The company has reaffirmed its commitment to an agreement reached with the IG Metall union in December regarding a restructuring program for its core VW brand.

The Osnabrück plant currently employs around 2,300 workers and has extended the production of its last convertible model until mid-2027. Following this period, alternatives for the facility's use will be explored further.

In a related development, Rheinmetall, a defense contractor, has shown interest in the Osnabrück site. Its CEO, Armin Papperger, has visited the location to discuss potential collaborations on military vehicle production, specifically armored cabs for trucks. Rheinmetall has been in partnership with VW's subsidiary MAN since 2010, focusing on military vehicle projects.

As VW navigates these financial difficulties and potential changes at the Osnabrück site, the company's management remains focused on exploring new avenues for growth and sustainability in the evolving automotive market.