Volkswagen weathers pandemic with USD10.7 billion profit

FRANKFURT, GERMANY (AP) — Volkswagen said on Friday it made better-than-expected profit of EUR8.8 billion after tax in 2020 despite the pandemic.

The world’s number two automaker said the rapid recovery of China, its largest single market, and resilient sales of luxury vehicles helped the bottom line.

The company gave an upbeat outlook for this year, saying it would carry momentum from the stronger second half of the year over into earnings going forward. It said it was striving for earnings in the top part of its forecast range of 5.0-6.5 per cent returns on sales, and predicted sales revenue would be “significantly higher”, assuming successful containment of the COVID-19 pandemic.

The results underline the uneven impact of the pandemic.

Manufacturing companies like Germany’s three big carmakers — Volkswagen, BMW and Daimler — have seen their sales and earnings hold up better than those for services, tourism and air travel companies.

The earnings figure was off 37 per cent from 2019. Sales revenue was down 11.8 per cent at EUR222.9 billion, but fell less than the 16.4-per-cent drop in unit sales to 9.2 million vehicles. That meant Volkswagen surrendered the title of biggest carmaker by volume that it had held since 2016 to Toyota, which sold 9.5 million vehicles.

Volkswagen common shares traded 1.2 per cent higher after the earnings statement. More financial details are to be announced March 16 at the company’s annual news conference.

Electric car ID3 cars stand at the factory area during a press tour at the plant of the German manufacturer Volkswagen AG, VW, in Zwickau, Germany. PHOTO: AP