VW reports stronger cash flow after cutting spending
Carmaker says improvement at its auto unit in 2025 follows lower than expected capital expenditure and R&D
Volkswagen said it generated net cash flow of €6bn from its automotive division in 2025, a significantly better figure than the carmaker had expected as it aims to cut costs to deal with growing Chinese competition.
The German company on Wednesday said it expected its positive inflows in its automotive division to be about €6bn, according to preliminary figures.
Previously, VW had forecast a net cash flow of about zero, although chief financial officer Arno Antlitz in October suggested the figure could be slightly positive.
Volkswagen said it also expected net liquidity at the end of 2025 to be €34bn, up €4bn from its forecast. The improvement in the company’s cash position was “primarily attributable to lower working capital and lower than expected investments in capex and research and development”, it said.
The automotive division is the core of Volkswagen’s business — covering car production across 10 brands and the group’s battery and engineering efforts — and its main revenue driver. Its cash position is closely monitored by investors and analysts, who have warned the company might need to step up its cost-saving drive if the figure deteriorates further.
The carmaker aims to make €6bn in savings by the end of the decade as it looks to respond to falling sales in China, high production costs in its European manufacturing base and increases in US tariffs.
Under a plan agreed at the end of 2024, the carmaker will slash production at VW brand factories in Germany and cut 35,000 jobs in the country by 2030.
Volkswagen has also trimmed its investment plans. The rolling budget, which is updated annually, is expected to fall to €160bn over the coming five years. For 2023-27, the figure was €180bn.
Struggles at sports-car maker Porsche, one of the 10 brands in the Volkswagen group, were expected to weigh on the company’s full-year results, which will be announced on March 10.
The group registered an impairment of €4.7bn in the third quarter after Porsche watered down its plans to release more electric vehicles and shifted its focus more towards petrol and hybrid models.