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.3.“
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.”
Volkswagen brand with solid start to year, but severe decline in February
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).
Net cash flow positive despite difficulties in first quarter
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.
Volkswagen focuses on attractive product portfolio, with sights firmly fixed on e-mobility
The Volkswagen brand is focusing on an attractive product portfolio, a strategy supported by its regionalized range of SUVs. Very much in demand, these models belong to the top-selling vehicles in their respective markets. Examples include the Tiguan and T-Roc in Western Europe (particularly Germany) and China, and the T-Cross in South America. Volkswagen is continuing its product initiative across all segments. The new Golf 8 is now being introduced into a growing number of markets. This summer, Volkswagen plans the Europe-wide roll-out of the fully-electric ID.3, the first updatable electric car based on the MEB toolkit.
Key figures for the Volkswagen brand:
|
Jan. – Mar. |
Jan. – Mar. 2019 |
Change |
|
|
Deliveries |
1,091,500 |
1,456,400 |
-25.1% |
|
Vehicle sales |
765,000 |
910,000 |
-16.0% |
|
Sales revenue |
18,965 |
21,538 |
-11.9% |
|
Operating profit* (€ million) |
481 |
921 |
-47.7% |
|
Operating return on sales* |
2.5% |
4.3% |
-1.8 ppt |
|
Net cash flow* |
470 |
601 |
-21.8% |
* before special items
|
Deliveries to customers by market |
Jan. – Mar. |
Jan. – Mar. 2019 |
Change |
|
Western Europe |
297,300 |
383,500 |
-22.5% |
|
Central and Eastern Europe |
54,500 |
62,000 |
-12.2% |
|
North America |
117,300 |
132,100 |
-11.2% |
|
South America |
101,600 |
105,100 |
-3.3% |
|
China (incl. HK) |
455,800 |
703,400 |
-35.2% |
|
Rest of Asia-Pacific |
29,800 |
37,600 |
-20.9% |
|
Middle East/Africa |
35,200 |
32,700 |
+7.8% |
|
Brand overall |
1,091,500 |
1,456,400 |
-25.1% |