The stock of Volkswagen (VWAGY) has been removed from a leading European index as the German automaker’s problems worsen.
Volkswagen’s stock has been ejected from the Euro Stoxx 50 as part of the index’s annual update. The index represents Europe’s biggest companies by market capitalization.
News of the removal from the Euro Stoxx 50 comes on the same day that the automaker issued a new profit warning.
Management at Volkswagen have lowered their expected operating return on sales to 1% from a previous forecast of 4% to 5.5% growth.
The latest downgrade, one of several this year by the car company, was blamed on an impairment charge related to its holding in luxury carmaker Porsche.
In a statement, Volkswagen also said that it continues to experience a “deterioration” in the market environment, particularly in China.
The company has said repeatedly that it is struggling with a global slowdown in its sales due to tariffs and a lack of interest in electric vehicles among consumers.
Volkswagen and other European companies are also grappling with competition from cheaper Chinese vehicles that have flooded the continent in recent years.
To cope, Volkswagen is undertaking a major restructuring to streamline its operations. The changes involve cutting 100,000 jobs and closing several manufacturing plants.
Volkswagen’s stock was replaced in the Euro Stoxx 50 index by Finland’s Nokia (NOK), which is getting a boost from artificial intelligence (A.I.) and data centre connectivity.
VOW3 stock has fallen nearly 30% this year and is currently trading at its lowest level since 2010. The share price is down 60% over the last five years and changing hands at 75.62 Euros.
Tech Insider
