Volkswagen Group Financial Statement and Ratio Analysis (FY2021–FY2025): Evaluating Financial Performance and the Sustainability of Its NEW AUTO Strategy

The global automotive industry is undergoing a profound transition driven by electrification, software-defined vehicles, and intensifying regional competition, which places sustained pressure on the margins and capital returns of incumbent manufacturers. This study examines the financial performance of Volkswagen Group over fiscal years 2021–2025 and evaluates the sustainability of its NEW AUTO strategy. Financial statement trend analysis, ratio analysis, and DuPont decomposition are applied to data drawn from the group's annual reports. Four research questions are addressed: the evolution of profitability, the DuPont driver behind the decline in returns, the contribution of NEW AUTO to long-term competitiveness, and the resulting investment stance. The results show that sales revenue rose from €250.2 billion in 2021 to €321.9 billion in 2025, while earnings after tax fell from €15.4 billion to €6.9 billion. Return on assets declined from 2.9% to 1.1% and return on equity from 10.6% to 3.4%, driven almost entirely by a fall in net profit margin from 6.2% to 2.1%, whereas asset turnover and financial leverage remained broadly stable. The analysis concludes that transformation costs have materialized ahead of their returns, and a conditional hold position on Volkswagen shares is supported.