Volkswagen leads global sales yet falls far behind Toyota in profitability
Volkswagen remained the top-selling carmaker in the first half of the year, but its profit lagged sharply behind Toyota, prompting a new margin-boost plan.
Volkswagen’s supervisory board, which includes labor unions and shareholders, approved a strategy to lift profit per vehicle to 9% after reporting a first-half profit of $2.99 billion on €158.102 billion in sales. Toyota, by contrast, earned over $14.6 billion and shipped nearly 4.7 million cars, maintaining its lead in both earnings and deliveries since 2020. The German automaker fell behind Hyundai-Kia, General Motors and BMW on the global profit ranking, as the industry wrestles with fierce Chinese competition and costly EV transitions.
Toyota’s dominance in hybrid models helped it dominate markets such as Spain, where it has been the top seller since 2022. Volkswagen also announced a further workforce reduction of 50,000 jobs, after earlier cuts announced for 2024, and its stock jumped 6.6% on the news, though it remains roughly 24% lower on the German exchange since the start of the year.
Why it matters
The gap between sales volume and profit highlights the challenges traditional automakers face in the electric-vehicle transition.
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