FRANKFURT (Reuters) – Shares in Volkswagen (ETR:) fell 1.5% in early Frankfurt commerce after Europe’s greatest carmaker late on Tuesday issued a revenue warning because of fees associated to the potential closure of Audi’s Brussels plant.
Volkswagen mentioned the prices of discovering an alternate use for the Brussels plant or closing it, in addition to different unplanned bills, would have an effect totalling as much as 2.6 billion euros ($2.8 billion) within the 2024 monetary 12 months.
“The revenue warning wasn’t anticipated. Response relies upon very a lot on analyst suggestions, particularly in the event that they settle for the ‘one-off’ character,” mentioned a neighborhood dealer.
Because of the fees, which additionally embrace bills associated to the closure of the gasoline turbine enterprise of MAN Vitality Options, Volkswagen now expects an working return on gross sales of 6.5-7% in 2024, down from 7-7.5% beforehand.
Like European friends, Volkswagen is below stress to chop prices within the face of fierce Chinese language competitors at house and overseas, one of many drivers of a push to understand effectivity beneficial properties of 10 billion euros.
“Any transfer by VW to cut back its value base can be welcomed by the market. They’re addressing their excessive fastened prices base, and that is extra vital,” mentioned Stephen Reitman of Bernstein Analysis.
($1 = 0.9241 euros)