VW slashes profit forecast to 1% on China sales slump, cost pressures

Volkswagen cut its 2026 profitability outlook to no more than 1% from a prior 4-5.5% range, citing weaker China demand and rising costs. The revision signals a sharp deterioration in the automaker's core earnings power and adds to evidence of structural headwinds for European manufacturers in China. Market reaction will hinge on whether this is company-specific or indicative of broader sector weakness.