Volkswagen shares dipped after the company issued an overnight profit warning and announced it was considering the potential closure of an Audi plant.

Volkswagen on Tuesday warned it may close the Brussels site of its luxury brand Audi due to a sharp drop in demand for high-end electric cars that has hit Europe's top carmaker, forcing it to cut its margin target for the current year.

In addition to a drop in EV sales, the Brussels site, which built around 50,000 cars last year, faces "long-standing structural challenges" including difficulty in changing its layout due to proximity to the city and high logistics costs.