Porsche writedown plunges Volkswagen deeper into financial abyss

Good morning! It’s Thursday, October 29, 2026 and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, all in one place. This is where you’ll find the most important stories shaping the way Americans drive and get around.

In this morning’s edition, Porsche stumbles and drags Volkswagen down, Hyundai’s crisis deepens and Toyota has just experienced its third consecutive month of declining sales and production. Despite everything, Carvana is having an unforgettable time.

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It seems that every day a new pessimism arrives within the Volkswagen Automotive Group. Well, today is no different, as the German automaker fell further into the red in the third quarter – posting its worst results in more than a decade as it battles ever-increasing challenges in key markets and continues a massive restructuring effort. Europe’s largest automaker just posted an operating loss of $6.6 billion over the past three months, hurt by about $8.9 billion in one-off items, most of which relate to a writedown of its now less valued stake in Porsche.

It was Volkswagen’s largest quarterly deficit since the Dieselgate-plagued fourth quarter of 2015, and a spokesperson for the automaker said the latest results make it clear there is no time to lose. From Reuters:

The findings underline the pressure on Volkswagen to overhaul its business model, facing fierce competition in China, billions of euros in annual tariff costs and heavy investment demands linked to the transition to electric vehicles in Europe, where Chinese competitors continue to gain ground.

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CEO Oliver Blume plans to cut 100,000 euros of jobs across the group, which includes the Audi and Porsche brands. Up to four factories in Germany face closure under the plan, which has sparked fierce opposition from unions and could trigger strikes as early as early next year.

Antlitz said Volkswagen’s operating margin on sales was just 3.8% in the first nine months of the year, even before one-off items.

“This is not enough in the long term,” he added.

Volkswagen is targeting an operating profit margin of 8-10% by 2030 as part of its restructuring program.

In September, Volkswagen reported one-time costs of around $11.1 billion and cut its profit margin forecast for 2026 to no more than 1%. Keep in mind that this figure has reached almost 8% in 2022. It will be incredibly difficult for the world’s second largest automaker to get out of the mess it finds itself in anytime soon, but for the sake of the European economy, I sure hope it does.

Hyundai – a monstrous automaker – is not immune to the miserable global economy we are currently experiencing. The Korean automaker just lowered its full-year vehicle sales and profit forecasts as a prolonged profit decline deepens as weak global demand and lost production due to labor unrest weighs on its ability to make huge money.

Today, Hyundai faces slowing sales, rising raw material prices and, you guessed it, increased competition from Chinese rivals, both at home and abroad. Add to that a series of union strikes that hurt production and shipments earlier this year, before a deal was reached in August, and you have less than ideal financial results. From the Wall Street Journal:

Sales declined in almost all major global markets except India and the United States, where demand for Hyundai’s hybrid models and sport utility vehicles remained strong.

Citing a tough business environment, Hyundai lowered its 2026 vehicle sales target from 4.16 million to 4.0 million units.

The company also lowered its operating profit margin target for the year to 6.3 percent to 7.3 percent from 5.5 percent to 6.5 percent, and reduced its investment plan to 16 trillion won from 17.8 trillion won.

The automaker announced Thursday that its net profit fell 24 percent year-on-year to 1.932 trillion won, or the equivalent of $1.44 billion, for the July-September period. This significantly missed a consensus estimate by FactSet of 2.406 trillion won.

Revenue fell 3.4 percent to 45.11 trillion won, while operating profit rose 5.5 percent to 2.677 trillion won.

Weak global demand and production disruptions are the main factors behind the weak results, Hyundai executives said in a conference call. A non-operating foreign exchange loss on foreign currency assets also weighed on results.

Global wholesale vehicle sales fell 11% year-on-year in the third quarter. At the same time, retail sales fell 10%. Things were a little more mixed in the US market, where wholesale vehicle sales were down 9.9%. However, retail sales actually increased by 3.5%. That’s at least something Hyundai can hold on to. Hyundai can also take solace in knowing that it’s not Volkswagen.

Volkswagen and Hyundai aren’t the only two auto giants facing problems right now. Toyota, the biggest of them all, faces its own problems. The Japanese automaker said global vehicle sales and production for Toyota and Lexus were down for the third consecutive month in September, driven by lower sales in China and the Middle East. From Reuters:

The world’s largest automaker saw global sales fall 2.2% from a year earlier to 860,107 vehicles, while production fell 3.2% to 889,079 vehicles.

Sales in China fell 19.7%, extending their decline to an eighth straight month as rising gasoline prices “weighed” on demand for gasoline and hybrid cars, Toyota said in a statement.

Production fell 18.6% in China and 2.9% in the United States, while it rose 5.8% in Japan.

Sales were also everywhere. In the Middle East, sales fell 29.8%. However, they increased slightly by 1.8% in Japan and 8.4% in the United States.

While car manufacturers are going through hell, Carvana is experiencing unforgettable moments. The new and used vehicle retailer just reported an 84% increase in third-quarter revenue to $483 million, driven by record revenue and sales, with revenue surpassing $8 billion, an increase of 42%. It also sold 217,385 vehicles during the quarter, surpassing 200,000 sales for the first time. From Automotive News:

The growing retailer aims to retail 3 million vehicles annually by 2030 to 2035. At current rates, Carvana is on track to sell about 870,000 vehicles annually, Garcia and Chief Financial Officer Mark Jenkins said in a letter to company shareholders. This figure represents only 2 percent of the total used vehicle market and 1.5 percent of the overall market, they said, providing room for growth.

Carvana has acquired seven Chrysler-Dodge-Jeep-Ram dealerships since February 2025. New car sales will fuel further expansion, they wrote.

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The company also continues to expand ADESA, the wholesale auction and repackaging business it acquired in 2022. Carvana added retail production capabilities at two additional locations during the third quarter, bringing the total to 21.

It is also building three ADESA sites, which are expected to begin production in 2027, Carvana said.

It’s rare that a corporate turnaround goes as smoothly as Carvana’s – and in such a short time, too. It seems like this is the world of Carvana now, and we’re just living in it. Car vending machines for everyone!

I was 16 – a sophomore in high school – when Sandy came to New Jersey, and I still remember it vividly. Luckily, my area of ​​Bergen Country, New Jersey, didn’t experience the devastation that parts of the Jersey Shore or New York did, but, man, those days were scary. It really felt like the end of the world, and I remember very clearly that they had to extend our school year because our school was closed for over a week due to lack of electricity. Wild times. Anyway, if you want to learn more about Superstorm Sandy, head over to History.com.

Gas prices are falling; there is no doubt about it. However, they’re not really moving at a useful pace, and that’s likely because oil prices are stubbornly stuck at high levels. WTI crude oil and Brent futures prices were at $101 and $110 respectively at press time, which is good for people with financial interests in these commodities, but very bad for people like you and me.

Here’s where national average prices currently stand, according to AAA:

AAA

All of this means the average price of a gallon of gasoline fell 2 cents overnight to $4.23, according to AAA. It’s a similar story with diesel, whose average price fell 2 cents to $6.33. If oil prices remain high, I don’t expect fuel prices to drop anytime soon.

I’ve seen this song pop up on my TikTok feed several times over the past few weeks, so I decided to finally check it out earlier this week while I was traveling for work. Now I’m obsessed with it. There’s something about Jones’ voice that really makes my brain itch. I won’t say it’s for everyone, but when you add in some really fantastic lyrics, you get a really great song in “Moon Bright Rain.”