Volkswagen Passenger Cars experienced a substantial impact on its business in the first three months of 2020 due to the Covid-19 pandemic. Despite a solid start to the year, deliveries to customers by the core Volkswagen brand decreased by around 25 percent to 1.1 million vehicles over the January to March period of 2020. In the same quarter, sales revenue fell by some EUR 2.6 billion (-11.9 percent) to around
EUR 19 billion. The core brand’s operating profit remained positive. Standing at around EUR 481 million, it fell by 50 percent in comparison to the previous year’s figure before special items. The operating return on sales in the first quarter of 2020 was 2.5 percent (4.3 percent in previous year before special items).
Ralf Brandstätter, COO of the Volkswagen brand: “After a solid start to the year, the global pandemic severely impacted our business as the quarter progressed. Our current focus is therefore ensuring liquidity. We are reviewing all our projects to reassess their importance to our short-term needs. However, this will have no impact on strategic projects such as the new ID.31.“
Alexander Seitz, CFO of the Volkswagen brand: “The Volkswagen brand was taking an extremely resolute approach to costs even before Covid-19 appeared. We will be reinforcing this policy with further measures to enhance efficiency and productivity.
Rigorous discipline with regard to expenditure and costs is more important than ever in the current situation. We remain on a solid financial footing.”
The Covid-19 pandemic caused the already difficult economic situation over the last few few months to become even more challenging. After a solid start to the year, the brand experienced a substantial decline in deliveries to customers from February onwards. In the first three months of 2020, the brand delivered a total of 1,091,500 vehicles (same period of the previous year: 1,456,400).
The ongoing measures to enhance the profitability and efficiency of the Volkswagen brand are having a positive effect in a challenging overall situation. In the first quarter of 2020, the net cash flow before special items of around EUR 0.5 billion remained in the positive range.
