Volkswagen shines in Frankfurt, higher than expected liquidity in 2025

  (Il Sole 24 Ore Radiocor) - Volkswagen is racing on the Frankfurt stock exchange thanks to better-than-expected preliminary liquidity data, against the backdrop of the easing of tensions with the US over the Groeland issue, from which the entire automotive sector has benefited. Thus, the share of the Volkswagen group closed 6.5% higher, leading the Dax. Bmw, Mercedes Benz and Porsche Ag also rose well, as did Porsche Automobil Holding and Stellantis in Milan.

According to preliminary figures, announced yesterday after the close of the session, Volkswagen Ag generated in 2025 a net cash flow of around 6 billion euros in the Automotive division as opposed to 5 billion in 2024. "As a result" the division's net cash flow reached "over 34 billion euros" as of 31 December 2025 from 31 billion three months earlier. Both figures, points out a group statement, "are significantly higher than Volkswagen's expectations of approximately zero billion euros and 30 billion euros, respectively, and are above the average market expectations available to the company." According to the car company, these positive changes are mainly attributable to a decrease in working capital and lower than expected investments in venture capital and research and development.

"Exceeding free cash flow expectations should clearly be seen as positive, given the growing concerns about Vw's need to strengthen its balance sheet and its ability to pay expected dividends," commented analysts at Oddo BHF. Deutsche Bank, already positive on the stock, reiterated its buy recommendation, raising the price target from EUR 110 to EUR 120. Barclays also confirmed the buy, as did Jefferies and RBC, while Bernstein reiterated its 'neutral' recommendation. Yesterday the Wolfsburg-based group, which will announce its annual accounts on 10 March, also announced that it plans to reduce management positions and consolidate production platforms to save EUR 1 billion (USD 1.2 billion) by 2030.

The company will reduce the number of board members of the group's core brands (Brand Group Core, i.e. Volkswagen Passenger Cars, Skoda, Seat & Cupra and Volkswagen Commercial Vehicles) by approximately one third by summer 2026. This reduction will decrease the board roles from 29 to 19. Under the new structure, the brands will each operate with only four board members - a CEO and executives for finance, sales and human resources. Functions such as development, procurement and production will be centralised at the Wolfsburg headquarters. The restructuring represents a significant simplification of Volkswagen's management structure as the carmaker seeks cost efficiencies across its operations.