Auto focus

The pandemic impact on Q1

Murali Gopalan | Updated on May 07, 2020 Published on May 07, 2020

The Volkswagen Group recorded a ‘substantial impact’ on its business as a result of the pandemic in the first three months of the current year (January-March).

Deliveries to customers fell 23 per cent from the previous year to two million vehicles. Frank Witter, member of the Group Board of Management responsible for Finance and IT, said the “gradual restart”, also of factories outside of China, had begun.

In Germany, dealers have reopened and the group has taken steps together to get the business up and running again while steering through this “unprecedented crisis with focus and determination”. VW expects deliveries to customers in 2020 to be significantly below the previous year due to the pandemic. Challenges will also arise particularly from the increasing intensity of competition, volatile commodity/foreign exchange markets and more stringent emissions-related requirements. Sales revenue of the group in 2020 is expected to be significantly below the prior year’s level as a result of Covid-19.

Overall, the VW Group expects operating profit for 2020 to be ‘severely below’ the prior year, but still to remain positive. Despite countermeasures, the R&D ratio and the ratio of capex to sales revenue in the automotive division are expected to be above the previous year’s level in 2020 due to lower demand and therefore falling sales revenues.

Published on May 07, 2020

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