Volkswagen earnings: Carmaker still expects to profit this year
“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,” Volkswagen’s chief financial officer Frank Witter said in a statement. “The Volkswagen Group is steering through this unprecedented crisis with focus and determination,” he added.
The group has made 100 changes to the way it operates, as it tries to restart business without risking the health of hundreds of thousands of workers. “The health of our employees and suppliers remains the clear priority here,” said Witter.
Volkswagen said it expects sales and profit to be “severely below the prior year, but still to remain positive.”
“Challenges will also arise particularly from the increasing intensity of competition, volatile commodity and foreign exchange markets and more stringent emissions-related requirements,” it added.
Volkswagen said deliveries to customers in China fell 35% in the first quarter but that it saw the first signs of a recovery there in March, following a steep decline in February. It expects “catch-up effects” in that market through the rest of the year.
The company said it expects global demand for new vehicles this year to be between 15% and 20% lower than in 2019. Asia Pacific should perform better than other regions, suffering a decline of between 10% and 15%.
Daimler said Wednesday that it expects sales, revenue and earnings in 2020 to be below the previous year due to the coronavirus pandemic. First quarter vehicle sales fell 17% to 644,300, while profit collapsed by 92% to €168 million ($182 million), the company said in a statement.
“Among the major sales markets, China is likely to be the first to reach a moderate recovery path,” it added.