KUALA LUMPUR, Jan 7 (Bernama) -- Bursa Malaysia’s benchmark index rebounded from earlier losses to close at its intraday high on Wednesday, gaining 0.27 per cent in late trading as buying interest returned to selected heavyweights. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 4.48 points to 1,676.83 from Tuesday’s close of 1,672.35. The benchmark index opened 0.88 of-a-point lower at 1,671.47 and subsequently hit a low of 1,665.94 during the mid-morning session before gaining momentum toward closing. On the broader market, losers led gainers by 565 to 512, while some 526 counters were unchanged, 1,046 untraded, and 10 suspended. Turnover improved to 2.73 billion units worth RM2.76 billion versus Tuesday’s 2.66 billion units worth RM2.76 billion. Dealers said that investors were cautious following geopolitical developments in Asia.
Volkswagen AG has issued its second profit warning in three months, signaling deepening challenges for Europe’s largest automaker. The company slashed expectations for revenue, profit, and cash flow on Friday due to weakening demand, predicting it will sell fewer vehicles in 2024 than in 2023—marking the fourth sales slump in five years.
This decline underscores Volkswagen’s difficulties, particularly its struggles with the shift to electric vehicles (EVs) and its shrinking market share in China, where local competitors like BYD have surged ahead. Volkswagen’s VW, Audi, and Porsche brands are losing relevance, especially in China’s rapidly evolving EV market, while competition from Tesla and Chinese EV makers continues to squeeze profits.
In China, once a key market for Volkswagen’s gasoline-powered cars, the company has failed to adapt quickly to the EV revolution, allowing local rivals to gain ground with innovative, affordable models. To counteract this, Volkswagen is closing plants, forging partnerships with Xpeng Inc., and promoting a new EV brand targeted at younger buyers.
Volkswagen’s premium brands, Audi and Porsche, have traditionally been profit drivers, but even these have started to falter, particularly in China, where Porsche’s sales fell 33% in the first half of 2024. The company now expects global deliveries to drop to around 9 million units this year, down from 9.24 million in 2023, reversing its earlier forecast of a 3% increase.
Chief Executive Oliver Blume is under pressure to make the company more competitive. Blume has scrapped job security pledges in Germany and is considering closing factories, potentially sparking a conflict with powerful labor unions. Volkswagen now forecasts an annual operating margin of 5.6%, down from a previous prediction of 7%.
The automaker faces headwinds from slower EV adoption in Europe, where reduced government incentives in countries like Germany and Sweden have caught manufacturers off guard. Chinese EV makers, with their low-cost offerings, are increasingly filling the gap in Europe’s lagging EV market.
Volkswagen's latest profit warning, coupled with a weaker cash flow outlook, raises concerns about the company's future, with analysts suggesting that restructuring and cost-cutting measures may accelerate in the face of declining performance.
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