VW's Twin Pressures: A 27% Share Slide Meets a Radical Wage Overhaul
Published on 08/05/2026 at 14:52 | Redaktion boerse-global.de
Investors watching Volkswagen's preferred shares have endured a bruising first half of 2026, with the stock shedding roughly a quarter of its value even as the broader DAX index races from one record high to another. The gap between the automaker's own trajectory and that of Germany's benchmark index tells a stark story of a company wrestling with structural decline in its core markets, high EV launch costs, and an increasingly assertive workforce pushing back on management's plans.
The Numbers Behind the Slide
The scale of the operational deterioration became clearer this week when Volkswagen reported an operating result of €5.9 billion for the first half of 2026 — down 11.6 percent year-on-year. The operating margin slipped to 3.8 percent, or 4.3 percent on an adjusted basis. The single biggest drag was a 31.6 percent collapse in Chinese sales, a market that was once the group's most reliable growth engine.
The second-quarter figures, released in late July, painted an even more sobering picture. Net profit tumbled 32.9 percent to €1.54 billion, down from €2.29 billion in the same period a year earlier, while global deliveries fell 8.6 percent to 2.08 million vehicles. The share price has tracked that weakness closely: at Wednesday's level of €76.50, the stock sits 0.55 percent lower on the day, roughly 30 percent below its 52-week high of €109.10 reached in mid-December, and down 26.55 percent since the start of the year. The market capitalization stands at around €35.9 billion.
A Workforce at the Center of the Storm
The response from the top has been a sweeping restructuring effort that puts labor relations squarely in the spotlight. CEO Oliver Blume has outlined plans to cut up to 100,000 jobs worldwide — a figure that has evolved from earlier reports of 50,000 positions by 2030, including 35,000 at the core VW brand. The company is also examining the closure of as many as four plants in Germany.
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Those proposals have met resistance. In early July, the supervisory board rejected Blume's initial savings package by a vote of 12 to 7, with worker representatives and the state of Lower Saxony — which holds 20 percent of voting rights — demanding stronger employment protections. The pushback appears to have shaped the company's latest move: a new wage system announced on Tuesday that takes effect January 1, 2027. The reform is designed to dismantle the historically entrenched pay divisions between production, administration, and development staff, creating a more flexible — and cheaper — personnel structure without resorting to outright plant closures.
The pattern repeats at subsidiary Porsche, where site protection has been extended through 2035 but roughly 5,000 jobs are still slated to go over the same period.
Industry-Wide Squeeze
Volkswagen is hardly alone in feeling the pinch. BMW announced this week that it will cut around 8,000 positions by the end of 2027, mostly outside production and through voluntary programs. Supplier Schaeffler has expanded its partial-retirement scheme by a further 1,300 positions. The common thread: shrinking margins in the legacy combustion-engine business and hefty start-up costs for electric mobility. The Ifo business climate index for the auto industry, despite a modest six-point recovery in July, remains deep in negative territory at minus 15.6.
The EV Conundrum
The core VW brand delivered 382,000 fully electric vehicles worldwide in 2025 — a marginal 0.2 percent decline year-on-year — while the group as a whole moved 983,000 EVs. But the first half of 2026 brought a sharper setback: just 438,500 electric vehicles found buyers, a drop of 5.8 percent. In China, the group's joint ventures saw their market share shrink to 13.9 percent in the first two months of the year, as domestic competitors continue to gain ground.
The response includes a push into the entry-level segment with the ID. Polo, an electric model priced under €25,000 that aims to fill a gap competitors have exploited. There are also early signs of progress on costs: factory expenses at the Wolfsburg, Emden, and Zwickau plants fell by nearly 30 percent in 2025.
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Betting on Xpeng to Fix China
On the technology front, Volkswagen is leaning on its partnership with Chinese EV maker Xpeng. The centerpiece is the "China Electronic Architecture" (CEA), which is meant to shorten software development cycles and reduce dependence on the group's struggling Cariad software unit. The first model built on this architecture — the ID. Aura T6, an electric SUV developed jointly with Xpeng and FAW featuring an AI-based cockpit system — launched in China on Monday. The ID. UNYX 09 fastback, another Xpeng collaboration, has received regulatory approval from China's MIIT and is slated to go on sale in the second half of 2026.
For investors, the calculus is straightforward but uncomfortable. The cost-cutting measures and the Xpeng alliance point to a company addressing its structural problems with some urgency. Yet the sales figures and the shrinking Chinese footprint suggest the growth story has yet to convince. Until those two narratives converge into something resembling a clear positive signal, Volkswagen's shares look likely to remain in the shadow of a DAX that keeps setting records.
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