German carmaker giant Volkswagen reported a 15% fall in its operating profit in 2024 compared to the previous year due to rising competition and increase in fixed costs, according to the financial report released by the company on Tuesday.
Volkswagen Group, which also includes Audi, Bugatti, Seat, Skoda and Porsche brands, had an operating profit of €19.06 billion ($20.7 billion) in 2024.
The company's sales revenues, meanwhile, increased by 0.7% to €324.6 billion in 2024 from €322.2 billion in 2023.
Volkswagen sold 9 million vehicles last year, down 3.5% from 2023's 9.4 million units.
"Growth in South America could not fully offset the decline in China; vehicle sales in North America and Europe at prior-year level," it said.
The company's board of management will propose to reduce dividend payments for 2024 by 30% compared to 2023.
"Our outlook reflects the global economic challenges and the profound changes that are happening in the industry," Volkswagen Group's CFO Arno Antlitz said.
"We keep combustion engines technologically competitive, we are simultaneously investing in electric models and software, and we continue to strengthen our regional presence-with a clear growth and investment strategy in the US," he added.
The closure of the Audi plant in Brussels was also cited among the reasons that increased costs.
The sharp declines in sales in Europe, the German manufacturer's main market, and in China had caused the company to drastically reduce its production capacity.
