BERLIN (Reuters) – Volkswagen’s core brands, including VW Passenger Cars, Skoda, SEAT/CUPRA and Commercial Vehicles, reported a 4.3% drop in their operating results on Thursday as the carmaker undergoes a restructuring to cut costs.

Its passenger cars brand saw a 27% fall in its operating result, with an operating margin of 2.9%.

Still, Czech-based Skoda saw its best ever financial year with an operating margin of 8.3% and its operating result up 30%.

The cost of new models, upfront costs of reducing personnel in administration and purchase incentives it granted at the start of the year to boost EV sales all dented profitability, the carmaker said.

“Costs for necessary restructuring measures had a significant impact on our performance…the year marked a turning point for us,” David Powels, finance chief for the group of brands, said in a statement.

The Volkswagen Group, which also includes brands like Audi, Porsche and Bentley, reported earlier this week that its operating margin hit 5.9% in 2024 and would at best increase slightly this year given trade tensions and high costs.

(Reporting by Victoria Waldersee, Editing by Rachel More)