VW's Recall Needs Two Visits Per Car as Profit Outlook Sinks to 1%
Published on 09/26/2026 at 14:30 | Editorial boerse-global.de
Volkswagen's autumn is turning into a test of logistics as much as engineering. A global safety campaign covering roughly three million vehicles is running into a parts bottleneck, just as the group's earnings guidance takes a far more serious hit.
Internal communications to service partners reveal that the corrosion-resistant specialty bolt at the heart of the recall is not available in sufficient quantities. The fix concerns a fastening screw on the steering gear that can corrode under exposure to road salt and moisture. According to Germany's Federal Motor Transport Authority (KBA), the bolt risks snapping and causing the steering to fail without warning. No accidents involving injury or property damage have been reported to authorities so far.
Because the proper part is scarce, workshops are being told to fit a conventional bolt in the interim, with a second appointment to follow once final components arrive. A company spokesperson described the two-stage approach as a sensible way of proceeding.
A Repair Measured in Minutes, Absorbed in Weeks
The underlying defect spans high-volume model lines built between 2013 and 2024. Within the core VW brand alone, some 2.1 million vehicles worldwide are affected, including such ubiquitous nameplates as the Golf, Tiguan, Touran and Caddy. Nearly 700,000 Audi Q3 units must also be checked, alongside vehicles from Spanish subsidiary Seat. At least 950,000 examples across the group's various brands are registered in Germany, according to the authority.
The swap itself takes less than an hour of labour per car. But when the same vehicle has to be disassembled twice on separate visits, scarce lift capacity gets tied up and customer patience wears thin — an operational headache that lands at an awkward moment.
Should investors sell immediately? Or is it worth buying Volkswagen?
Guidance Slashed on €10 Billion in One-Off Charges
Two weeks ago, restructuring costs and planned job cuts moved to centre stage, prompting the union to open review talks. On 30 September, management and the works council will meet in Hanover to negotiate savings and the future utilisation of German plants.
That backdrop makes the 18 September guidance cut sting all the more. Volkswagen slashed its forecast for the full-year 2026 operating return on sales to as low as 1%. The driver is roughly €10 billion in one-time charges, of which about €6 billion stems from a write-down on the Porsche stake, compounded by higher provisions for the planned workforce reduction and persistent weakness in China.
China: A Market Once Synonymous With Profit
The central question for future earnings power is whether new model partnerships can carry the group through a brutal competitive shakeout in the Far East. China was for decades Volkswagen's most important profit engine, but conditions there are deteriorating fast. China chief Ralf Brandstaetter was blunt on Tuesday, forecasting that the Chinese passenger car market could contract by around 20% in the current year 2026 — a decline he explicitly likened to the slump seen during the COVID-19 pandemic. For Western manufacturers, the pressure is compounded by an aggressive price war waged by domestic rivals such as BYD and Geely.
Management is attempting to fight its way forward. On Thursday, Volkswagen began pre-sales in China of the ID. UNYX 09, the second electric model developed jointly with Chinese partner Xpeng. Reuters reports the official market launch is scheduled for the end of October — the first real stress test of the "in China, for China" pivot. Meanwhile, talks continue over a joint venture in India with the JSW Group. According to a Bloomberg report, the Indian partner is demanding that Volkswagen absorb a tax burden of US$1.4 billion. Details of the agreement remain open.
Two Analysts, Two Targets, One Split Verdict
Media reports indicate that Berenberg confirmed its "Buy" rating on 16 September with a price target of €100. Jefferies was even more bullish the same day, keeping its "Buy" call and setting a target of €120.
The bear case rests on structural risks and looming outflows. Should the forecast 20% contraction in China materialise, even modernised platforms are unlikely to generate adequate margins there. Add to that significant operational friction at home: since the restructuring agreement two weeks ago, the stock has shed 11.6% of its value. Reports suggest the group plan also envisions cutting more than 4,000 additional jobs at subsidiary Porsche. Volkswagen declined to comment officially. The India project adds further uncertainty — should the company actually have to shoulder the US$1.4 billion tax burden demanded by JSW, it would strain an already weak liquidity position.
Where the Shares Stand
Equity markets took the recall delays in their stride. The Volkswagen preference share closed Friday at €71.90, a modest daily gain of 0.9%. Beneath the surface, sentiment remains shaped by structural challenges: year-to-date, the stock is down 31%. As long as it holds above its 52-week low of €69.20, the possibility of a bottoming-out remains intact — though chart stabilisation would require tangible progress in the operating business. A further slide in Asian sales, or fresh concessions demanded by labour representatives and suppliers, could send the shares to new annual lows.
The next concrete catalyst is already close: the official sales launch of the ID. UNYX 09 at Chinese dealers at the end of October. The initial order intake for that model will show whether the catch-up campaign against local rivals is genuinely bearing fruit.
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