Volkswagen Drops Out of Euro Stoxx 50 Index as Pressure Mounts
- On Monday, Volkswagen was ejected from the Euro Stoxx 50 index following a Friday profit warning in which the automaker cut its operating margin forecast to 1%, down from 4% to 5.5%.
- Volkswagen flagged around €10 billion in one-off charges, with more than €6 billion stemming from a writedown at Porsche, in which the company holds a 75.4% stake, amid "further deterioration" in the China market.
- Shares have fallen 27.5% this year despite approval earlier this month of a major restructuring effort to cut 100,000 jobs as Volkswagen grapples with waning profits and the transition to EVs.
- Funds tracking the Euro Stoxx index must now sell their Volkswagen holdings, adding pressure to the stock; Deutsche Bank analysts said the warning "initially looks severe" but "significantly overstates the deterioration in the underlying business."
- The company expects "additional restructuring charges" in the coming months as the transformation process proves "very expensive and complex," reflecting broader struggles across Europe's auto sector where Jeep and Dodge-maker Stellantis faced similar ejection last year.
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26 Articles
The German car group Volkswagen has dropped out of the Euro Stoxx 50, a major cross-sector stock index of leading companies in the eurozone, for the first time in fifteen years. This is reported by the British business newspaper Financial Times. This occurs on the same day that tens of thousands of workers across Germany – including those at Volkswagen – are striking to save jobs and factories.
Volkswagen drops out of Euro Stoxx 50 index as pressure mounts
Volkswagen has been removed from the Euro Stoxx 50, the eurozone's benchmark index of its largest listed companies, taking effect as markets opened on Monday just days after Europe's biggest carmaker warned that one-off charges would wipe out most of its profit this year.
The exit decision was known on September 12 by Stoxx50, after its quarterly review, however this exit only took effect this Monday, 21.
Volkswagen has been removed from the Euro Stoxx 50, the eurozone's most important blue-chip stock index, for the first time in fifteen years. According to market participants, the move could further push down the German automaker's already plummeting share price, the Financial Times reported.
After the closing of the stock exchange on Friday, the Volkswagen share is no longer part of the European leading index. This does not change the operating business - the step can nevertheless have consequences for the share in the short term.
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