The effects of the Covid-19 pandemic significantly clouded the business of the Volkswagen Passenger Cars brand in the first quarter of 2020.
The Volkswagen Group’s core brand had a solid start to the year, but deliveries fell by around a quarter to 1.1 million vehicles in the entire period from January to March 2020. In the same period, sales revenues decreased by around 2.6 billion euros (-11.9 percent) to around 19 billion euros. The core brand’s operating result remains positive. It is around EUR 481 million, which is a halving compared to the previous year before special items. The operating return on sales after the first three months of 2020 was 2.5 percent (previous year before special items: 4.3 percent).
Ralf Brandstätter, COO of the Volkswagen brand, said: “The Volkswagen brand had a solid start to the year, but the effects of the global pandemic have had a significantly negative impact on our business in the further course. The current focus is therefore on securing liquidity. We are therefore putting all projects back to the test with regard to their short-term necessity. Strategic issues like the new ID.3 run without restriction. “
Alexander Seitz, CFO of the Volkswagen brand, said: “The Volkswagen brand had worked very consistently on its cost position even before the Covid 19 pandemic. We will continue this with measures to further increase efficiency and productivity. In the current situation, absolute spending and cost discipline are more important than ever. We are still financially robust.”
Volkswagen brand with solid start to the year, sharp decline in February
The challenging macroeconomic environment in recent months has been exacerbated by the effects of the Covid 19 pandemic. After a solid start at the beginning of the year, the brand had to accept a sharp drop in deliveries from February. In total, the brand delivered 1,091,500 vehicles worldwide from January to March 2020, a 25.1 percent decline from previous year (1,456,400 units). Largest decline was seen in China where sales dropped by 35.2 percent.
Net cash flow positive despite tension in the first quarter
The ongoing measures to increase profitability and efficiency at the Volkswagen brand are having an effect in the tense overall situation. Net cash flow before special items in the first quarter of 2020 was positive at around EUR 0.5 billion.
Volkswagen focuses on an attractive product portfolio, with e-mobility firmly in view
The Volkswagen brand relies on an attractive product portfolio that is also supported by a regionalized SUV range. The models are in high demand and are among the top sellers in their respective markets. These include the Tiguan and T-Roc in Western Europe and especially Germany, as well as in China and the T-Cross in South America. Volkswagen continues to push its product offensive across all segments. The new Golf 8 is currently being introduced in more and more markets. Volkswagen plans to launch the fully electric ID.3 throughout Europe this summer, the first update-capable electric car based on MEB.