The slump in Volkswagen sales reveals the drama of the automotive industry

The VW Group’s worldwide sales figures fell by almost half in April due to the corona crisis. The bright spot for car brands comes from China.

Spring is actually the best time for the car trade. The dealers stock up on additional cars early on to meet the expected high demand. But everything is different this year: The Corona epidemic has turned the usual boom month of April into horror weeks for retailers and automakers. “For us, this is an emergency stop from the spring high,” says Jürgen Stackmann, Sales Director of the Volkswagen brand.


The auto industry was hit hard by the global restrictions on public life in April. It is likely to be the worst month for the automotive industry this year – because, with a few exceptions in Asia, business has almost been dormant.

The VW group released its sales figures for April on Friday. The drama of the past few weeks can also be seen in Wolfsburg. There has never been a comparable slump in global car demand in such a short time.

The Wolfsburg-based company sold a good 470,000 vehicles around the world in April. In the same month last year, however, there were still more than 866,000 cars, which corresponds to a decrease of about 45 percent. Business for Volkswagen in Western Europe and South America was particularly problematic (both at minus 77 percent). This primarily reflects the week-long closure of car dealers.

With all negative records: Volkswagen did not do so badly on its home market in Germany. VW Brand Board Member Stackmann put the minus in the Federal Republic at 67 percent.

However, the development is much more dramatic in the other European countries such as Great Britain, France, Spain and Italy, which were hit much harder by the Corona pandemic. This can be seen from the sales figures of the Spanish VW subsidiary Seat, which decreased by 80 percent in April – especially on the home market in Spain.

The German sales figures show that the restrictions on public life were not quite as extensive as in southern Europe and that more economic activities were therefore possible. The situation is also problematic in Great Britain, where almost no new cars were sold in April. In the Federal Republic, the prospects are still the best from a VW perspective. “Germany has a good chance to come back,” said Jürgen Stackmann.


The Chinese automobile market is currently the only bright spot for Volkswagen. In the People’s Republic, the corona crisis had already reached its peak in February, so the economic recovery could start earlier there. This can be seen in the sales figures of the VW group, which in April even achieved a small plus of one percent with 306,000 cars sold in China.

Volkswagen is benefiting from the good development of the premium brands Audi and Porsche. In addition, the new entry-level brand Jetta has quickly established itself on the Chinese car market. These cars are produced and sold exclusively in the People’s Republic.

Commercial vehicle business becomes a problem area

In Wolfsburg there is growing optimism that the corona-related slumps from February and March can be compensated for later in the year. Volkswagen has outperformed the entire market in recent weeks: its market share has increased from 20 to 21 percent this year. The Wolfsburg-based company remains the undisputed market leader.

In the first four months of this year, the VW Group is currently a good 25 percent below the previous year’s result. “China gives hope and may show the way out of the corona crisis,” believes Frank Schwope, automotive analyst at NordLB in Hanover. The Chinese car market has become the most important sales area for Volkswagen in recent decades. The group sells around four million vehicles there annually, which corresponds to around 40 percent of global sales.

VW is also highly profitable in the People’s Republic. The Chinese subsidiaries transfer the equivalent of more than three billion euros in dividends to Germany each year. Despite the corona crisis, similar amounts can be achieved again this year, Volkswagen hopes.

The most important passenger car brands of the VW Group lost consistently around the world with high rates of sales. Porsche did best with minus 35 percent, followed by Volkswagen cars (minus 38 percent) and Audi (minus 41 percent). At Skoda, the minus is almost 57 percent.

The declines in commercial vehicle brands are still somewhat larger. The Hanover subsidiary VW Nutzfahrzeuge (VWN), manufacturer of the Bulli and other light transporters, especially for the commercial sector, was able to sell 14,400 vehicles in April, a decrease of almost 68 percent. VWN does not have the Chinese market to compensate, with which the car brands can at least partially cushion the weakness from European business. VWN is very much focused on Europe.

The development of the two group-owned truck brands Scania and MAN was similarly weak. There is no equalization from China there either. At the Swedish truck manufacturer, the minus is almost 67 percent, at the Munich truck subsidiary there are almost 63 percent fewer trucks sold. These figures reflect the falling willingness to invest from the commercial sector. Regardless of the corona crisis, commercial vehicle declines had already been calculated this year.

MAN works council chairman Saki Stimoniaris already called for a government subsidy program for new and young used trucks on Thursday. The market for heavy trucks will halve this year. At the height of the corona crisis, it became clear how important the truck industry is for supplying the population. “Since Corona, everyone knows that the commercial vehicle industry is system-relevant. Without us, almost nothing moves in freight transport,” says Stimoniaris.

Contact the author: dominicwood@wheelsjoint.com


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