Volkswagen still expects to post an operating profit this year despite the “unprecedented crisis” triggered by the coronavirus pandemic, which slammed sales and earnings in the first quarter.
The world’s largest carmaker said Wednesday that first-quarter operating profit plummeted to €904 million ($978 million) from €3.9 billion ($3.3 billion) a year ago, as vehicle sales fell. It warned that profit for the full year would be considerably below 2019, but still positive.
Volkswagen, which also owns the Audi, Porsche and Seat brands, said group vehicle sales fell 25% to 1.9 million. Deliveries to customers were down 23% at 2 million.
“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.
Carmakers have had to contend with a slump in demand for vehicles and huge disruption to their operations, as measures to curb the coronavirus pandemic shut down factories and keep customers at home. Ford on Tuesday posted a $1.9 billion loss for the first quarter, warning that this would balloon to $5 billion in the current quarter.
