Slump in demand, cut supply chains, closed factories: The corona pandemic is putting considerable pressure on business at the world's largest automaker. Production is now starting up again. For the rest of the year there is great uncertainty at VW.
Wolfsburg (dpa) - The VW Group is preparing for the significantly worse business figures this year due to the effects of the corona pandemic.
One expects an operating result "seriously declining in comparison to the previous year", which will however still end up in a positive area. The company announced on Wednesday in Wolfsburg. Sales are also likely to "be significantly below the level of the previous year," it said.
The largest auto company in the world also announced the detailed figures for the first quarter. Accordingly, the net profit attributable to the main shareholders fell by more than 86 percent to 405 million euros compared to the first quarter of 2019. Profit before tax fell from 4.1 to 0.7 billion euros.
Volkswagen had already published preliminary data in mid-April. These have now been confirmed: Between January and March, sales decreased from 60.0 to 55.1 billion euros, and operating profit before special items from 4.8 to 0.9 billion euros. In the same period last year, additional costs from the diesel crisis had impacted earnings by EUR 1.0 billion.
"The global Covid-19 pandemic significantly impacted our business in the first quarter," said CFO Frank Witter. The group is experiencing an "unprecedented crisis". The group subsidiary Audi narrowly missed the red numbers: the operating result of 15 million euros in the first quarter was significantly below the previous year's figure of 1.1 billion euros.
With the main brand VW Passenger Cars, the result in the current business almost halved compared to the previous year, it decreased from 821 to 481 million euros. Things don't look much better at Porsche, where the operating profit of 529 million euros in the first quarter was more than a third (36 percent) lower than in the same period last year.
Deliveries across the Group fell by 23 percent to around 2 million vehicles. The drop in sales spanned almost all brands, only Bentley was able to grow slightly.
Net liquidity in core auto business fell by 3.5 to 17.8 billion euros in the first three months - at the end of December 2019 it was still at 21.3 billion euros. This means that solvency is "still solid," said VW. CEO Herbert Diess recently estimated that up to EUR 2 billion in liquidity was lost during the corona lockdown.
CFO Witter said that it would probably not be possible to return to pre-crisis levels in all markets. But it is already possible to speak of a "certain recovery". "We will fight for every customer. We will not write off the year."
Because of the corona crisis, VW had cashed in its exact forecast for 2020 two weeks ago. Like many other manufacturers, the group had to stop operating in factories and car dealerships due to contagion risks and lack of replenishment due to interrupted supply chains. In addition, turbulence on the raw materials and capital markets put pressure on business.
After almost one and a half months of standstill, the company is slowly starting up production in Germany as well. After the Zwickau site started up last week, Wolfsburg headquarters and other plants were added this week - albeit initially with lower capacity and increased safety standards. Factories in the United States, Latin America and South Africa are scheduled to start operating in early May. In China, the country of origin of the pandemic, almost all locations have recently been back online.