German auto workers stage protests as Volkswagen profit warning rocks sector

FRANKFURT, Sept 21 (Reuters) - German auto workers staged nationwide protests on Monday, less than three days after a shock profit warning by Europe's biggest auto maker Volkswagen highlighted the sector's unprecedented challenges from high costs and fierce Asian rivals.

The protests at Volkswagen , BMW BMWG.DE and parts supplier Bosch come as Germany's most important industry faces painful job cuts, possible production relocations and even plant closures, a crisis that was also reflected in the result of two state elections on Sunday.

"Due to lethargy and disastrous misjudgements, most managers have failed to keep pace with developments in e-mobility, digitalisation and battery technology, thereby causing the German automotive and supplier industries to fall behind," Horst Ott of trade union IG Metall said.

European automakers are facing increased competition from Asian rivals abroad and at home, creating a major problem for Volkswagen, which is already battling overcapacity on the continent, US tariffs and plunging profits in China.

Volkswagen on Friday cut its profit margin outlook for 2026 to 1% at the most, blaming the sluggish Chinese market and higher provisions for retirements but also sobering expectations for its Porsche P911_p.DE sportscar brand.

Part of the problem was accelerated demand for less profitable electric vehicles, underscoring the sector's ongoing dependence on combustion engines that have for decades fuelled Germany's top economy.

Volkswagen shares were 0.6 lower at 0816 GMT, while Porsche's stock fell 2.3%, extending Friday's declines.

Shares in Porsche SE PSHG_p.DE - Volkswagen's biggest shareholder, which also slashed its outlook on Friday - were 2.9% lower.

($1 = 0.8715 euros)