FRANKFURT, GERMANY (AP) – Automaker Volkswagen saw car sales and operating profit plunge in the first quarter as the coronavirus outbreak closed dealerships and halted production.
Global sales fell 23 per cent to 2.0 million vehicles in the first three months of the year, from 2.6 million in the year-earlier quarter, the company said yesterday. Operating earnings excluding financial items such as interest and taxes shrank by 81 per cent to EUR0.9 billion from EUR4.8 billion (USD5.2 billion) a year earlier.
The company said yesterday that despite the disruption from the virus it remained financially strong with what it termed a “robust” cash pile of EUR17.8 billion. Sales revenue fell by 8.3 per cent to EUR55.1 billion.
Chief financial officer Frank Witter said in a statement that “the global COVID-19 pandemic substantially impacted our business in the first quarter. We’ve taken numerous countermeasures to cut costs and ensure liquidity and we continue to be robustly positioned financially. The Volkswagen Group is steering through this unprecedented crisis with focus and determination.”
The quarter was marked by the shutdown of the company’s plants due to the virus outbreak. Production has re-started in China and is being brought back online in Europe. Auto dealerships have reopened in major markets China and Germany.
The company said it still expected to make an operating profit for the year but that earnings would be “severely below” last year’s.
Volkswagen, headquartered in Wolfsburg, Germany, makes cars under brands including Volkswagen, Audi, Porsche, SEAT, Skoda and Lamborghini.