Porsche Automobil Holding SE, which holds over 53% of ordinary shares in Volkswagen, said it recognized 3 billion euros ($3.46 billion) of impairments in the first half of the year related to its investment, and another 200 million euros on its Porsche holding.

Volkswagen recently cut sales guidance for the year and has pledged to deepen cost-saving measures as it grapples with a deteriorating Chinese market that has seen a surge in car launches from domestic brands this year and a prolonged price war.

After working on a broad cost-cutting plan throughout 2025 and 2026 that includes an agreement to cut 50,000 jobs across the group in Germany by 2030 and slash billions of euros a year in costs, Volkswagen executives have warned that the measures won't be enough.

It aims to cut its model lineup by as much as half and will continue to reduce manufacturing capacity.