Oliver Killig / Volkswagen
VW ID.3: The electric car is due to come onto the market in summer despite software delays and the corona crisis
The Corona crisis will be a tough test for the VW Group’s main brand in the middle of the ramp-up of e-mobility this year. The business figures continued to improve in 2019. In addition to the planned billion dollar investments in new ones Electric models and the plans for a new cheap electric car, the manufacturer now has to deal with impending loads from the consequences of the pandemic to adjust.
Read on mm premium: Volkswagen is planning a cheap car again
“We will do everything we can to protect our employees and stabilize our business,” said CFO Alexander Seitz on Wednesday in Wolfsburg. “We cannot yet estimate how big the effects will be today.”
For the Volkswagen core division, however, it is already foreseeable: “The corona crisis is unprecedented and will no doubt have an impact on business development.”
As a precautionary measure, all German and numerous other European factories for VW passenger cars and locations of the group’s internal supply division are due to start on Thursday evening close for at least ten days initially. The aim is to reduce the risk of further infections with the Sars CoV-2 virus. There are now infections among employees. In addition, there are potential bottlenecks among suppliers after the supply chains have so far been relatively stable.
VW does not dare to take a closer look at the coming months. Chief Financial Officer Frank Witter had on Tuesday explained to the entire group: “We don’t know what is left of the 2020 forecast.” You want to “but not completely write off the year”. The plants in China are on the right track, but a reliable forecast is “currently simply impossible”. CEO Herbert Diess said, the financial risks could not yet be estimated. Short-time work in Germany was applied for by the truck subsidiary MAN.
In 2019, sales of the VW brand increased by 4.5 percent
Other carmakers also pulled the ripcord to protect their employees from possible infections. Daimler stops most of its production in Europe for two weeks, BMW for four weeks. Opel is already shutting down production in a controlled manner.
The past fiscal year was still going well for the cars with the VW emblem. Despite the economic slowdown in many countries, operating profit before special items such as contaminated diesel engines rose from 3.2 to 3.8 billion euros. Sales rose by 4.5 percent to 88.4 billion euros, and the brand sold just under 6.3 million vehicles.
Managing Director Ralf Brandstätter now expects more difficult times: “In 2020 we will face major challenges, especially against the background of the corona pandemic.”
Prospects for Europe’s car markets are rapidly darkening
Industry experts currently assess the prospects for Europe’s overall car market as bleak. After two sharp drops in new registrations across the EU by 7.5 percent in January and again 7.4 percent in February, the consulting firm EY expects a drastic decline in the near future. “March will be very weak, in April the new car market will practically come to a standstill,” it said.
Despite the uncertainty, VW wants to push ahead with the expansion of the e-fleet this year. In addition to the ID.3, the despite software delays is to go to customers from the summer Electric SUV ID.4 as a direct follow-up model in the schedule. At least 1.5 million electric cars are to be sold in five years. The massive investments are also necessary in order to be able to comply with the stricter EU limits for CO2 emissions.
Read also: 10,000 technicians fight for VW flagship car ID.3
The proportion of SUVs in VW sales in Europe has grown to over 37 percent, car manufacturers earn a lot of money with the often-viewed city SUVs. Most recently, the smaller Tiguan went well. Other hybrid models are also planned.
By the end of 2019, VW had achieved 2.7 of the total of 3 billion euros in planned cost reductions in its savings and renovation program “Future Pact”. Around 10,900 jobs were cut, 4,500 new ones were created in future-oriented areas such as e-drives and digitalization. IT experts in particular have good chances.
wed / dpa-afx