At €12.4 billion (US$13.4 billion) in 2024, net profit fell 30.6% compared with the previous year, even as overall sales grew slightly to reach €324.7 billion.

The group’s operating result, a closely watched measure of underlying profitability, also fell to €19.1 billion, 15% lower than in 2023.

“The drop was due to a “significant increase in fixed costs” and one-off expenses totalling €2.6 billion, primarily aimed at restructuring,” the company said.

Volkswagen has been hit hard not just by rising costs but limped on with a switch to electric vehicles, where it faces stiff competition from Chinese rivals.

Volkswagen deliveries fell almost 10% in China last year, even as they were flat or rose in the rest of the world.

The weakness in key market China was behind an overall 3.5% drop in unit sales, with Volkswagen only shifting around nine million vehicles worldwide last year.

Cost pressures also squeezed Volkswagen’s operating margin down to 5.9% in 2024, from some 7% the previous year.

The outcome was somewhat better than feared by the group, which midway through last year predicted a margin of some 5.6% for 2024.

“Consistently reducing costs and increasing profitability” was key for the firm going forward, Volkswagen finance chief Arno Antlitz said in a statement.

After a bumpy year in which Volkswagen announced plans to cut capacity at its domestic German plants and shed 30,000 jobs at home, the group said it expected a slight pickup in 2025.

Volkswagen said it expected revenue this year to exceed the 2024 figure by “up to 5%”.

For 2025, it is aiming for a margin of between 5.5% and 6.5%.

“Our outlook reflects the global economic challenges and the profound changes that are happening in the industry,” Antlitz said.