Volkswagen Will Make a Profit This Year Despite COVID-19 Crisis
When 2020 began (that was only just over four months ago, though it seems like years), no one could’ve predicted the profound effect that the coronavirus crisis would have on the world. The auto industry took a massive hit in the year’s first quarter, and the effects of the pandemic will no doubt be felt for years to come. However, even amid the low sales, canceled events and reveals, and postponed release dates, there are positives to be found. One such silver lining came last week when it was revealed that, despite the current situation, Volkswagen will make a profit this year.
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Volkswagen will make a profit in 2020
In a recent earnings report, Volkswagen shared its operating profit from the first quarter of 2020. As expected, the COVID-19 crisis had taken its toll. Earnings had fallen sharply from first-quarter 2019’s $3.3 billion to a mere $978 million. Other affected areas included a drop in group vehicle sales of 25 percent, and a 23-percent decrease in customer deliveries. However, despite this sharp fall in sales, the German automaker confirmed that they will still be in the positive for the year.
“The global Covid-19 pandemic substantially impacted our business in the first quarter,” said Frank Witter, Volkswagen’s Chief Financial Officer, in a statement. “We’ve taken numerous countermeasures to cut costs and ensure liquidity and we continue to be robustly positioned financially. The Volkswagen Group is steering through this unprecedented crisis with focus and determination.”
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Over the last few weeks, several automakers have begun reopening plants and resuming vehicle production. Volkswagen is among those who have restarted operations in Europe, with its Wolfsburg plant recently ending its longest shutdown in 82 years. With most of its factories in China also back in action and new safety measures in place, Volkswagen is beginning a slow but steady recovery. Stay tuned for more updates as the auto industry continues to bounce back.
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