Porsche Writedown Plunges Volkswagen Deeper Into The 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, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, Porsche is stumbling and bringing Volkswagen down with it, Hyundai's slump is getting worse, and Toyota just saw its third-straight month of sales and production slides. Despite it all, though, Carvana is having the time of its life.

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It feels like every single day there's a new bit of doom and gloom coming from the Volkswagen Automotive Group. Well, today is no different, as the German automaker sank deeper into the red in the third quarter — posting its worst results in over a decade while it battles ever-growing challenges in key markets and pushes ahead with a massive restructuring effort. Europe's largest automaker just posted a $6.6 billion operating loss for the past three months, hit by about $8.9 billion in one-off items, most of which are linked to a writedown of its now-less-valuable Porsche stake.

The loss was Volkswagen's largest quarterly deficit since Q4 of 2015, when it was in the throes of Dieselgate, and a spokesperson for the automaker said these latest results make it clear that there's no time to lose. From Reuters:

The results ​highlight the pressure on Volkswagen to overhaul its business model as it faces fierce competition in China, billions of ‌euros ⁠in annual tariff costs and heavy investment demands from the transition to electric vehicles in Europe, where Chinese rivals continue to gain ground.

[...]

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

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

"That is not enough in the long term," he added.

Volkswagen is targeting an operating profit margin ⁠of ​8%-10% by 2030 under its restructuring programme.

In September, Volkswagen flagged about $11.1 billion in one-off costs and slashed its 2026 profit margin forecast to no more than 1%. Keep in mind that number hit nearly 8% back in 2022. It's going to be incredibly hard for the world's second-largest automaker to pull itself out of the mess it's in any time soon, but for the sake of the European economy, I sure hope it does.

Hyundai — a monster of an automaker — is not immune from the miserable global economy we've got going on right now. The Korean company just cut its full-year vehicle sales and earnings forecasts as a prolonged profit slump deepened thanks to weaker global demand and production lost from labor disputes weighing on its ability to make gobs of money.

Now, Hyundai must deal with slowing sales, higher raw-materials prices and — you guessed it — intensifying competition from Chinese rivals both at home in Korea and abroad. Add in a series of union strikes that hurt production and shipments earlier this year before a deal was reached in August, and you get some less-than-ideal financial results. From The Wall Street Journal:

Sales declined in nearly all major global markets, except India and the U.S., where demand for Hyundai's hybrid models and sport-utility vehicles remained solid.

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

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

The automaker said Thursday that net profit dropped 24% from a year earlier to 1.932 trillion won, equivalent to $1.44 billion, for the July-September period. That widely missed a FactSet-compiled consensus estimate of 2.406 trillion won.

Revenue fell 3.4% to 45.110 trillion won, while operating profit increased 5.5% to 2.677 trillion won.

Sluggish global demand and production disruptions were the main factors behind the weak results, Hyundai executives said on a conference call. A nonoperating foreign-exchange loss on foreign-currency assets also weighed on the bottom line.

Global wholesale vehicle sales were down 11% on the year in the third quarter. At the same time, retail sales dropped 10%. Things were a bit more mixed for the U.S. market, where wholesale vehicle sales were down a similar 9.9%. However, retail sales were actually up 3.5%. That's at least something for Hyundai to hang its hat on. Hyundai can also take solace in knowing it's not Volkswagen.

Volkswagen and Hyundai aren't the only two automaking giants facing issues right now. Toyota, the biggest of them all, has to deal with its own issues. The Japanese automaker said global vehicle sales and production for Toyota and Lexus were down for the third straight month in September — being dragged by declining sales in China and the Middle East. From Reuters:

The world's biggest automaker ⁠saw global sales decline 2.2% ​from a year earlier to ​860,107 vehicles, while production dropped 3.2% to 889,079 vehicles.

Sales in China fell 19.7%, ​extending their decline to an ​eighth consecutive month, as higher petrol prices ‌weighed ⁠on demand for gasoline and hybrid cars, Toyota said in a statement

Output ⁠fell 18.6% in China and 2.9% in the US, while it ⁠rose ​5.8% in Japan.

Sales were equally all over the place. In the Middle East, sales slumped a staggering 29.8%. However, they rose a slight 1.8% in Japan and a solid 8.4% in the U.S.

While automakers are living in hell, Carvana is having the time of its life. The new- and used-vehicle retailer just posted an 84% surge in third-quarter income to $483 million on the backs of both record revenue and sales, with revenue surpassing $8 billion — a 42% increase. It also sold 217,385 vehicles during the quarter, topping 200,000 sales for the first time ever. From Automotive News:

The growing retailer aims to sell 3 million retail vehicles annually by 2030 to 2035. At its current pace, Carvana is on track to sell roughly 870,000 vehicles per year, Garcia and CFO Mark Jenkins said in a letter to the company's shareholders. That tally represents only 2 percent of the total used-vehicle market and 1.5 percent of the overall market, they said, offering room to grow.

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

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

It also is building out three ADESA locations, which should begin production in 2027, Carvana said.

It's rare that a corporate turnaround works out as well as Carvana's did — and in such a short amount of time, as well. It seems that this is now Carvana's world, and we're just living in it. Car vending machines for everybody!

I was 16 years old — a high school sophomore — when Sandy hit New Jersey, and I still remember it so vividly. Luckily, my area of Bergen Country, NJ didn't see nearly the devastation that parts of the Jersey Shore or New York City saw, but, man, that was a scary few days. It really felt like the end of the world, and I distinctly remember they had to extend our school year because our school was closed for over a week due to a lack of power. Wild times. Anyway, if you want to learn more about Superstorm Sandy, head over to History.com.

Gas prices are going down; there's no doubt about that. However, they're not really moving at any sort of useful pace, and that's probably because oil prices are stuck at stubbornly high levels. WTI Crude Oil futures and Brent Crude prices were sitting at $101 and $110, respectively, at the time of publication, which is good for people with financial interests in such commodities, but very bad for folks like you and I.

Here's where national average prices stand right now, according to AAA:

AAA

What this all means is the average price of a gallon of gas came down 2 cents overnight to $4.23, according to AAA. It's a similar story with diesel, which saw its average price drop 2 cents to $6.33. If oil prices remain elevated, I don't expect any sort of fuel price retreat to come about anytime soon.

I've seen this song pop up on my TikTok feed a bunch 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 scratches an itch in my brain. I won't say it's for everyone, but when you add in some really fantastic lyrics, you've got a truly great song in "Moon Bright Rain."